The Uganda Electricity Distribution Company Limited (UEDCL) has officially taken over the country’s electricity distribution, marking a significant shift in the sector.
The transition, which took place yesterday, was accompanied by a notable reduction in electricity tariffs, bringing relief to consumers across various categories.
Electricity Tariffs Reduced
The Electricity Regulatory Authority (ERA) announced a 14% reduction in end-user tariffs, effective immediately.
According to ERA board chairperson Dr. Sarah Kanaabi Wasagali, domestic consumers will now pay UGX 756.2 per unit, down from UGX 775.7 in the previous quarter.
The first 15 units will continue to be offered at a subsidized lifeline rate to support low-consumption households.
Commercial enterprises will benefit from a reduction of UGX 25.8 per unit, now set at UGX 546.4, while medium-scale manufacturers will see their rate drop to UGX 355.1 per unit from UGX 417.8.
Businesses in the service industry, including hotels, will now pay UGX 412.8 per unit instead of UGX 434.5.
Large industrial consumers will enjoy a UGX 51 reduction per unit, with their new rate set at UGX 300.4.
Extra-large industries such as steel and cement manufacturers will experience the biggest cut, with their tariff decreasing from UGX 299.1 to UGX 203.6 per unit.
Energy Minister Ruth Nankabirwa highlighted that these adjustments have resulted in UGX 250 billion in government savings.
She attributed the reductions to factors such as the expiration of Umeme’s concession, a stronger Ugandan shilling, and an anticipated 10.54% growth in electricity demand this year.
A New Era for Electricity Distribution
The symbolic handover of electricity distribution assets from Umeme Limited to UEDCL signifies the government’s commitment to managing the power sector more efficiently.
Umeme had managed the distribution network since 2005. During the handover, Umeme’s Managing Director, Selestino Babungi, reflected on the improvements made over the years, including cumulative investments of $850 million, expansion of the distribution network, and reduction of energy losses from 38% to 16%.
UEDCL’s Managing Director, Paul Mwesigwa, assured Ugandans that the company is prepared to improve service delivery.
He outlined plans to reduce energy losses further to 15.59% by year-end and expedite pending customer connections. “We have already procured essential equipment, including transformers, cables, and meters, to meet customer needs swiftly,” Mwesigwa said.
The company targets 300,000 new connections this year and has secured UGX 270.4 billion in operational funding.
Challenges and Future Prospects
While expressing optimism, Nankabirwa cautioned that the transition comes at a politically sensitive time, with upcoming elections likely to increase pressure on service providers.
She urged UEDCL to prioritize clear communication with the public and ensure consistent service delivery.
Regarding Umeme’s exit, the government and Umeme continue negotiations over the final buyout amount.
Umeme’s board chairperson, Patrick Bitature, confirmed receipt of UGX 118 billion as the approved buyout sum but noted a pending dispute over an additional UGX 234 billion. Discussions to reconcile this difference are expected to conclude within 30 days.
With UEDCL now in charge, the government anticipates more affordable electricity and improved service efficiency, ushering in a new chapter for Uganda’s power sector.
