Writer: Amos Sanday. PHOTO/COURTESY
On April 1, Uganda Electricity Distribution Company Limited (UEDCL) will officially take over the last-mile distribution of electricity from Umeme, which is ending its 20-year concessionaire.
This change raises both hope and concerns for the nation's power future. Will it light up the country’s power sector, or is it an accident waiting to happen?
Umeme’s two-decade legacy isn’t entirely dim. The company demonstrated remarkable efficiency in its early years, exceeding its target to connect 60,000 customers in the first five years of its contract. It also improved revenue collection rates from 73 percent in 2005 to an impressive 99 percent by 2023. These achievements shouldn’t be overlooked, especially considering the chaos that preceded its tenure.
Remember the 1980s? Uganda’s power sector was in shambles, plagued by inefficiency and chronic underinvestment. With only 230,000 people connected to the grid and the Uganda Electricity Board teetering on collapse with 30 percent losses, the situation was dire. Umeme’s arrival in 2005 marked a turning point, though not without its controversies.
Now, as UEDCL prepares to take the reins, they are making bold promises. Their ambitious plans include adding 300,000 new customers annually and maintaining Umeme’s impressive 99 percent revenue collection rate. But here’s the elephant in the room: UEDCL needs a staggering Shs4.02 trillion to cover operational costs and compensate Umeme’s investments.
The scepticism isn’t unfounded. A 2019 World Bank report revealed that during Financial Year 2017/2018, UEDCL’s average service interruption duration—one of the measures frequently used to assess the quality of supply performance—was 51 hours per customer, while Umeme maintained a more reasonable 19 hours. This stark difference suggested legitimate concerns about UEDCL’s technical capabilities.
However, this transition also presents an opportunity to reimagine Uganda's electricity distribution model. While some critics celebrate Umeme’s departure, citing years of poor service, the real question is whether UEDCL can truly deliver on its promises of better days ahead.
The challenges are formidable. UEDCL must balance revenue generation with service affordability, improve infrastructure, and manage public expectations. UEDCL’s target to reduce distribution losses from 16.4 percent to 15 percent by 2027 sounds modest but requires substantial investment and expertise.
The success of this transition will depend on meticulous planning, stakeholder collaboration, and an unwavering commitment to transparency. The government’s support through infrastructure investment is encouraging, but the spectre of potentially higher electricity bills looms large over consumers.
The path ahead requires more than just ambitious goals. It demands practical solutions, sustainable financing, and, most importantly, a genuine commitment to public service. Whether UEDCL can rise to this monumental challenge remains to be seen, but one thing is certain—Uganda’s energy future hangs in the balance.
The next few years will be crucial in determining whether this transition marks a new dawn for Uganda's power sector or a return to its troubled past. For the sake of Uganda’s development and its citizens’ wellbeing, we must hope it's the former.
The writer, Amos Sanday, is a research fellow at EPRC,
Makerere University
