The fallout from Umeme’s exit continues to unravel with simmering fights between the country’s electricity sub-sector regulator, Electricity Regulatory Authority (ERA), and the distributor, Uganda Electricity Company Limited (UEDCL). The tussle centres on the recurring power outages.
ERA faults UEDCL for what they call inefficiency, starting with the questionable absorbing of former Umeme staff, during which experienced network operators were reportedly sidelined in favour of inexperienced new employers.
The regulator, according to insiders, also argues that Umeme usually received annual investment approvals between Shs137b and Shs172b, while UEDCL upon taking over the network in April was allocated Shs251b for their first year operations but are fumbling.
In addition, ERA also raises queries over the Shs10b UEDCL received annually from the Umeme concession for asset management, which they argue should have been used partly for network rehabilitation.
On the other hand, multiple accounts indicate UEDCL accuses ERA of ‘either covering up’ the derelictions or ‘sleeping’ on its inspector function, including failing to meticulously diagnose the network at least during the last three years, which technical derelictions have had a burgeon effect on the system load. Amid the several planned investments and reforms, some power industry players say ‘unless the regulator evolves into a more strategic, transparent, and accountable body’ the country risks repeating the same cycle of crisis and repair. ‘The lights may be on, but without real regulatory accountability, public trust remains dim,’ one official argued. A case in point is the Namugongo substation in Kira Town Council mooted in 2015 to serve the then growing hamlets of Kira, Namugongo, Kyaliwajala, Buwate, Sonde, Kasangati, among others.
At least Shs14b was reportedly spent on the 200MW Namugongo-Nakwero 11 kiloVolt feeder line with capacity to serve at least 50,000 customers. However, officials learnt only recently that the substation has a capacity of 100MW. With the extensiveness of developments in Kira Town Council, power has to be rationed across emerging areas of Mulawa, Nabusugwe, Nakwero, Bulindo. ERA argued that 200MW ‘could have been a general projection’ of demand in the area but not necessarily the capacity that was installed. Last Thursday, ERA officials launched a nationwide inspection of electricity infrastructure following complaints about unreliable power supply. The officials started at the Entebbe substation with installed capacity of 80 mega volt-amperes (MVA).
It then emerged the substation is idle as there is no accompanying evacuation line supposed to be constructed by UEDCL.
However, UEDCL argues that the investment for the evacuation line by Umeme was reportedly disallowed by ERA. Other substations said to be under overstrained include Namugoona, installed in 1994 and serves areas including Namungoona, Nansana, Kigobe, Lubya Hill, Natalia Stage, Lugala, Kosovo, Masanafu, Kaye Zone, Namungoona; Mutundwe substation, installed in 1993, and serves Rubaga Division and Kibuye; and, the Waligo substation, installed in 2012, and serves areas such as Luteete, Kyanja, Kitetikka, Mpererwe and Kanyanya.
The UEDCL’s Head of Corporate and Stakeholder Affairs, Mr Jonan Kizza, last evening declined to publicly discuss internal disagreements, but underlined that the Umeme-UEDCL transition is not a single-day event as is assumed. ERA’s Director for Corporate and Consumer Affairs, Mr Julius Wandera, said: ‘The sector must synergise, pick up the lessons and work towards consumer satisfaction.’
In a July 2024 report on the state of the distribution network, UEDCL flagged defects within the distribution network, fleet and land-related facilities amounting to $85m (Shs292.4b), aggravated by non-compliance and delayed identification of deficiencies which hindered timely remediation efforts.
‘It is recommended that an equivalent amount be provided for to address these gaps before the retransfer date,’ the report read in part.
It remains unclear on who was supposed to act on the findings. UEDCL, as the network owners, point to ERA, while ERA say their intervention was limited by concession and contractual provisions. In simple terms, following the enactment of the Landlord and Tenancy Act in 2022, many landlords lately require a security deposit from new tenants, which is a refundable sum of money, intended to cover potential damages to the property beyond normal wear and tear. Would the $85m (about Shs293.8b) be lessened from Umeme’s buyout amount?
Officials say it is complicated as the odds on the buyout clause, for which government negotiators of the concession even waived the country’s sovereign immunity and jurisdictions over its current and future assets in any part of the world save for its aircraft, naval vessels and other defence-related assets or assets protected by the Diplomatic and Consular privileges, were against Uganda.
At departure Umeme even had a Shs500b debt to Uganda Electricity Transmission Company Limited (UETCL), which insiders say the company is playing hard ball to pay.
Umeme initially claimed 234.7m (Shs856b) as the buyout subject to the Lease and Assignment Agreement (LAA) first entered with the government and on May 17, 2004 (and amended in 2005). A final audit put the buyout amount at $201m (Shs736b), exclusive of applicable taxes. This has since increased to Shs1 trillion.
The Attorney General’s office has since taken over negotiations of the buyout. However, there are key concerns that some government officials are majority individual shareholders in Umeme, which could impair their judgement in the divorce settlement.
The disdain among power sector executives is mutual. This, amid reports of some officials already capitalising on the prevailing mess in distribution to shop around for a private company for coupling with UEDCL in the interim. The finger pointing has sucked in the Uganda Electricity Transmission Company Limited (UETCL) for non-investment in key infrastructure to alleviate the system overload.
However, UETCL’s Manager for PR, Mr Muhammad Lubogo, distanced the company from the UEDCL-ERA entanglement saying their ‘only unavailability is mainly due to planned system shutdowns required for ongoing projects such as the Kampala Metropolitan System Improvement Project scheduled for completion in 2026.
‘In the recent days, there have been very few isolated UETCL-related outages incidents reported, like when the Kawaala mobile substation transformer protection was unstable.
But this has since been stabilised,’ Mr Lubogo said last evening. Officially, according to multiple sources, there is consensus among the power sector players-from the parent Ministry of Energy to UEDCL to UETCL, the bulk power transmitter, and ERA-that the crisis, since mid-April, is a result of system overload worsened by Umeme’s non-investment in the key infrastructure since late 2022 when they were officially notified about non-renewal of their concession when it expired on March 31, 2025.
Upon inheriting the network, comprising 60 distribution substations, 15 switching stations, 18,756.03km of medium voltage lines, 32,794.08km of low voltage lines and 19,319 distribution transformers, on April 1, UEDCL went on a connection spree, bringing the rickety system to a grinding halt.
The UEDCL Managing Director, Mr Paul Mwesigwa, told the State House Investors’ Protection Unit weekly meeting on September 16 that they had grown connections from 1.7 million in April to 2.4 million currently, while energy losses had been cut down from 19.1 percent to a low of 16.8 percent.
While the notification of Umeme to cease investment in line with the LAA was meant to keep the buyout amount in check, according to accounts, it appears as though UEDCL ‘sleep walked’ into taking over an unstable system.
Sources said during a Ministry of Energy top management meeting, attended by all the power sector players, a fortnight ago, the Energy Minister Ruth Nakanbirwa expressed disbelief about the messy state of affairs. The ministry’s Permanent Secretary, Ms Irene Bateebe, last evening said a number of internal discussions have been held to the effect.
‘We are supporting UEDCL in its urgent procurements to address the overloaded transformers and substations. We are doing this jointly with ERA and UEDCL,’ she said.
Meanwhile, UEDCL’s cocktail of challenges include managing some 2,400 former Umeme employees, some of whom, according to insiders, have been accused of sabotage owing to embitterment from the movement from the private sector to the public sector.
UEDCL’s Kizza said they don’t have a clear reason to instigate an audit into the claims of sabotage.
‘We keep hearing those things from the public, but naturally one has to understand and appreciate the dynamics of a transition. You are talking of 2,400 employees we absorbed. Initially, there was the fight for jobs, but that is no longer the case as they were absorbed. Now you have to deal with managing expectations,’ he said.
He added: ‘On the other hand you have to appreciate that the network doesn’t break down at once; it is a gradual process, and coupled with non-investment for almost three years, which symptoms are manifesting now. For instance 75 percent of transformers across the country don’t have protectors, and as soon as we started scaling up connections they started blowing up. It is an issue that is blamed on us now, and yet it has been there. ‘