Umeme technician carries out a connection. PHOTO/ FILE
The country’s main electricity distribution company, Umeme, is expected to officially retransfer the power distribution system to the Uganda Electricity Distribution Company Limited (UEDCL) today after a nine-fold increase in customer base.
This handover of the national electricity distribution assets in Kampala, occurring amid ongoing discussions about the buyout amount, marks the end of a 20-year concession granted by the government, which began in March 2005.
The 20-year Umeme concession for electricity distribution concluded on February 28, 2025, and is now in the retransfer transition period.
At the climax of the journey, Umeme proposed a buyout figure of $234 million (Shs853 billion), but after a review by the Office of the Auditor General, the government reduced it significantly to $118 million (Shs430 billion).
Mr Peter Kaujju, the Umeme spokesperson, yesterday revealed to this publication that they received the money from the government and that they are ready to hand over the mandate today. He quickly added that their main focus right now is to retransfer the assets to ensure operations continue smoothly.
“The figure (from the government) was shared with us. The money which was not in dispute has come to us; Umeme received the money. I can confirm to you," he said when asked whether they have accepted the final amount determined by the government.
"The next course of action will be determined by the board and shareholders. But for now, it's the handover, showing them what happened in which area so that work continues. And we are happy that that is going to happen after this very interesting journey of 20 years. So we've all dedicated our efforts to ensure that we have a smooth handover tomorrow,” he added.
According to Umeme, matters, including any decisions requiring shareholder approval, will be addressed at the Annual General Meeting (AGM), which is expected to happen in May.
What is retransferred?
Information from Umeme indicates that the company has more than doubled the network size to 42,466kms from 16,000kms in 2005 and increased transformer zones from 6,000 in 2005 to 16,783 as well as increased the customer base nine-fold from 250,000 in 2005 to 2.37 million.
“We are handing over the national electricity distribution assets to UEDCL, and the function will happen tomorrow (today) at 9 am in Lugogo,” Mr Kaujju observed. Adding: “So we are doing all the necessary preparations to ensure that the distribution assets go back to the operations of the government of Uganda under UEDCL,”
Mr Kaujju further said that besides the network and customer base, they are handing over structures and service centres. “So you're talking about the network –a whole line of about almost 50,000 kilometers of the network across the country. You're talking about over 17,000 transformers; you're talking about substations,” he said.
“You're talking about structures, including service centres, where we serve people from, and you're also talking about people who are running the distribution network. So that's what we are handing over,” he added.
Yesterday, when the Monitor visited the electricity substation in Lugogo, Kampala, where the momentous handover will be happening today, some officials were holding discussions in the open ground adjacent to the facilities and the office premises, but there were no marked signs of preparations for the celebrations like decorations.
The pothole-ridden road leading to the substation, which is off the Jinja-Kampala road, has also not been worked on.
The discussions around the retransfer go beyond the money. Some Ugandans have also used social media to express fear that there would be increased power blackouts and disruptions following the transition, the fears that UEDCL dismissed.
“The UEDCL informs the public that all Umeme operations, including the sale and distribution of electricity in Uganda, will terminate on 31 March 2025. UEDCL will become the power operator effective April 1,” UEDCL stated last week.
UEDCL also advised the public to be cautious and on watch during this transition, as unauthorised individuals may act as UEDCL officials.
Future of 3200 staff
The retransfer would also affect the employment of some of the over 3000 staff that Umeme currently employs.
“They (UEDCL) are going to absorb a substantial number of the people that have worked here. Remember, we have had about 3,200 staff. Some people will not be able to cross,” Mr Kaujju noted.
Ms Ruth Nankabirwa, the minister for Energy and Mineral Development, told NTV recently that they would absorb most of the Umeme staff.
“We have recruited 90 percent of the current Umeme staff; we have recruited them into a new system,” she said.
“But because we have to do away with duplications, there are positions which have fallen redundant, those you have to remove and they are few, 191 of them, we will keep them on a special list so that we can call them when need arises."
Buyout debates
According to details from Parliament, the government has revised the loan request to buy out the electricity distribution company, Umeme, from more than $190 million, which the Ministry of Finance presented to Parliament, to around $118 million.
Parliament, on March 20, amid questions on how the buyout figure was determined, adopted the proposal for the government to borrow over $190m from Stanbic Bank, on condition of confirmation of actual monetary amount of Umeme's investment by the Auditor General.
The Committee on National Economy had recommended halting the loan approval until the Auditor General, Edward Akol, determines the actual amount owed to Umeme. The committee said they noticed inconsistencies in the figures provided by different government agencies.
The committee raised concerns over the government’s proposed loan amount, which stands at $190 million, which they said was significantly higher than the $127.66m Umeme has yet to recover from its investments in Uganda.
As the discussions increased in the public domain, Umeme, in a March 26 public notice, indicated that they had “submitted an Estimated Buy Out Amount of $234m” to the government. The company also said it would await the final audit report “before the final reconciliation.”
During the plenary session on Thursday, March 27, 2025, before the revised amount of $118 million was passed, Deputy Speaker Thomas Tayebwa encouraged the government to take the special audit report into account while concluding negotiations with Umeme.
This move, however, faced resistance from Mr Ibrahim Ssemujju, the MP for Kira Municipality, who demanded a thorough examination of the report.
“We have never passed a report of the Auditor General without the MPs reading it. Have you waived those particular rules that [now] reports can be passed without MPs processing them?” Mr Ssemujju asked.
