In a move aimed at ensuring affordable electricity for all Ugandans, the government officially took over power distribution and sales operations, marking the end of Umeme Ltd’s 20-year concession. The Uganda Electricity Distribution Company Ltd (UEDCL) has been granted licenses for electricity distribution and sales by the Electricity Regulatory Authority (ERA), a shift expected to lower electricity tariffs across the country.
Energy Minister Ruth Nankabirwa, during a press briefing at the Uganda Media Centre in Kampala, reassured citizens that the transition would lead to further reductions in electricity costs. She emphasized the government’s commitment to affordable and reliable power.
“The existing tariff packages, such as the declining block where the more you consume, the less you pay, will remain. We are committed to providing affordable power for industrialists and other users,” Minister Nankabirwa said.
She announced plans to reveal the 2025 tariffs on January 2, assuring the public of continued tariff reductions.
A comparison of tariffs between the last quarters of 2023 and 2024 reflects this downward trend. Domestic consumers, for example, saw unit costs drop from UGX 805 to UGX 796, while commercial rates decreased from UGX 611 to UGX 599. Medium industrial users experienced a reduction from UGX 461 to UGX 448, and large industrial consumers’ rates fell from UGX 384 to UGX 378.
Minister Nankabirwa attributed the lower costs to the government’s approach, which aims to significantly reduce the return on investment required by private operators like Umeme, which was set at 20 percent. She noted that UEDCL’s target is much lower and will be finalized after financial assessments.
The decision not to renew Umeme’s concession, which expires on March 30, 2025, was made in 2022. Cabinet recommended UEDCL’s takeover, ensuring a smooth transition. The government is finalizing a buyout of Umeme’s assets, initially estimated at UGX 921 billion but later revised to UGX 849 billion.
Paul Mwesigwa, Managing Director of UEDCL, outlined ambitious investment plans to improve power distribution.
“We plan to invest $70 million (approximately UGX 256 billion) annually over the next 25 years. This investment will address power cuts by upgrading the network, installing substations, and improving transformers,” he said.
UEDCL’s operational expertise, gained from distributing power in remote areas such as Karamoja and Moyo, positions the company to tackle challenges during the transition. Mr. Mwesigwa also pledged to reduce the current 15 percent power loss rate and combat infrastructure vandalism through public sensitization campaigns.
ERA CEO Ziria Tibalwa Waako affirmed that the transition aligns with the government’s broader strategy of ending private concessions in essential services. The shift to state-run operations reverses Uganda’s 2005 decision to privatize power distribution, a policy initiated under World Bank and IMF guidance. President Museveni halted further privatization in 2017, citing its adverse effects on service delivery.
As UEDCL assumes full control, Ugandans can expect enhanced service delivery and continued reductions in electricity costs, a move hailed as a win for households and industries alike.
