Umeme to spend Shs468b before exit 

Electricity distribution company Umeme says it is executing a number of investment projects worth $130m (Shs468b) as part of its obligation to deliver on their contract, which expires in 2025.

Speaking at the public hearing of the annual tariff review for 2024 on Friday, Mr Selestino Babungi, the Umeme managing director, said until the last day of the concession, they will be executing investments that include maintenance, upgrade of a number of transformers, adding of new ones and rehabilitating sub-stations.

“We are executing a number of investments to reaffirm our obligations to deliver on the licence. This will continue until the last day of the concession,” Mr Babungi said.

“We are upgrading substations in Hoima, Jinja, Mbale, Mattuga, West Bank in Jinja, Owen Falls, we are taking dedicated lines to hospitals, addressing the key concerns of the country, upgrading a number of transformers, and adopting technology,” he said.

He added that over the years, Umeme has improved electricity distribution in the country and currently, it makes 30,000 new monthly connections.

The managing director also said they have reduced electricity losses from 16.4 percent to 15.2 percent and revenue collection stands at 99 percent since the introduction of Yaka. Asked if they are spending the money and yet their 25-year concession is running out, he said they want to hand over the power distribution sub-sector in a better state than what they inherited from Uganda Electricity Board.

On Friday, the companies in the power sector; Umeme, Uganda Electricity Generation Company, (UEGCL), Uganda Electricity Transmission Company (UETCL) and the Uganda Electricity Distribution Company LTD (UEDCL) made public presentations to the regulator, the Electricity Regulatory Authority (ERA) about their planned expenditure in 2024 and how it will affect the final tariff.

UEGCL requested the regulator to allow them spend a total of Shs.91.9b to cater for, among other things, operating and maintaining an expanded network and workforce following the new infrastructure around the country and also purchase of a floating boom to control floating islands.

UETCL requested the regulator to allow them spend Shs2.3 trillion for among others, operations and maintenance, while UEDCL asked ERA to add them Shs.14b onto the Shs96b they were allocated last year to enable them absorb the additional staff when the Umeme contract comes to an end.

Mr Zilia Wako Tibalwa, the chief executive officer of ERA, said the merging of some of the power companies will not affect their budgets.

“The regulatory authority provides for various licences. Even as the structure of the electricity industry changes, the licences will not change. For example, the distribution, the supply  and sales license will remain the same,” she said.

“What will change is the corporate identity where you have one board taking care of generation, transmission, distribution and you have the same common service departments for the whole company like procurement, finance, human resource but the licenses will remain in place and the revenue determined per licence,” she added.

She also said the law allows Umeme to invest 20 percent of the revenue it earns and plough back 80 percent on operations and maintenance and also manage customer needs.

Mr  Tibalwa said the Umeme expenditure is necessary so that when they hand over the company, whoever takes over finds a healthy institution.