How has the transition been so far?
It’s six [eight] months since we took over the operation of Umeme on April 1, 2025, and cumulatively, we have taken over seven private operators, including Umeme.
We are chasing our Key Performance Indicators (KPIs), making sure that power is supplied, and procurements are moving on. So, we have also concluded our three-year strategic plan, which we are implementing.
Are you sure that during this transition, you are taking the right steps to ensure that industries and the manufacturers operating within them are satisfied?
Among the fundamental decisions that the government has ever made is to transfer the responsibility of power distribution to the government because electricity is among the backbones for the country, and it plays a fundamental role in the development of other sectors, including influencing the macroeconomic variables.
In that case, the decision that was made was to make sure that electricity is managed within the reasonable cost of capital because that is a fundamental issue, and the transaction that we have gone through has an impact on the change in policy.
But the country has developed. The population has gained skills, including the time that you work with and good governance.
The decision of taking over private operators means changing the policy to have government leadership to enhance the access agenda for both the population and the manufacturing industry to manage the cost of capital because as a government institution, we are in a position to attract low-cost capital based on the shareholder and ability to get a sovereign guarantee. So in that case, this transition has achieved that.
On April 1, we started with a raw tariff at a 14 percent reduction; that was a fundamental move. What this deduction has done to the manufacturers is enormous because we have seen their bills reducing, and we have also started seeing consumption in terms of units going up.
This means they have increased production capacity, they have increased employment opportunities, more outputs and products are being produced on the market, and they are expected to be priced within the right pricing.
There are about seven categories of tariffs. The first tariff is for the domestic customer-the customer who consumes at the end; it is about Shs700. The other category of the tariff is for the small commercial petrol stations and the other three-phase ordinary customers. It is in the range of Shs600.
The third category is the medium category/industry, which comprises maize millers, hotels (three- to five-star hotels), and others such as buildings and arcades.
The current tariff model that has been formulated since we came in has separated manufacturers and services. So the tariff, for example, for the manufacturers’ medium industry is Shs355 per unit, and the tariff for medium industry services is Shs412.
Why are industries and households struggling with power issues during the transition, similar to pre-UEB times?
After taking over the network, we improved its growth to meet rising energy demand, which increased from 986 megawatts (MW) to 1,115 MW-an increase of about 13 percent.
Despite adding new customers and reconfiguring systems, the network has become overloaded.
Umeme halted investments three years ago due to funding issues and advice from the government, leading to a lack of substantial improvements.
Consequently, the rate of new customer connections slowed down, and we have connected some customers who applied long ago.
Our analysis has shown that the network is at maximum capacity, prompting us to connect new customers to prevent electricity theft while enhancing our systems.
We have already upgraded several substations, including those in Kakiri and Mbarara, and begun constructing new substations in Kasanga, Majinji, and Kiira to address fluctuations in service. Overall, the network faces strain at three critical stages as demand continues to grow.
How much more investment does UEDCL need, or should the government provide to stop the fluctuations and darkness?
Currently, the major feeders are being worked on, and we are managing the transformer zones. Our analysis indicates that we need to address 3,500 overloaded transformer zones across the country. Out of these, there are approximately 518 to 600 that are critically damaged. As of October 30, 2025, we had worked on 79 of these critical zones.
We have issued contracts for 150 projects to inject transformers. Our target is to inject 500 transformers by the end of December to stabilise these critical zones.
However, as we connect more customers, additional load is inserted into the network. Our analysis shows that for every 200 customers added to the network, we need a 100 KVA transformer.
In our five-year strategic plan, we need $950 million. However, in the first year of operation, we received approval to spend $74 million, and the funds have been secured. We have ordered stock worth more than $134 million, which will sustain us for the next 18 months.
Will that be enough to address all your logistical problems and infrastructure challenges?
In the first 18 months, our distribution network will grow as we connect more customers, requiring increased investment and replacements for older installations.
An analysis reveals that 26 percent of our substations need refurbishment and that 74 percent of inherited transformers lack proper protection due to insufficient maintenance by the previous operator.
We are sourcing transformers from six Ugandan manufacturers, initially ordering 2,500 units. Although production capacity has been low, it is now increasing, and we are deploying the transformers on-site to meet high demand. Our operations are focused on being a commercial, profit-making venture instead of a traditional government operation.
Given the ongoing power challenges, can the government assure citizens and businesses that it will manage electricity supply more efficiently than the previous operator?
Among our key performance indicators, we have collected 99.5 percent of our revenue sales, while the previous operator collected 98 percent. This improved collection rate has enabled us to pay our supplier, Uganda Electricity Distribution Company Limited (UEDCL), 100 percent of what we owe.
Currently, they do not have any outstanding invoices from us. This represents a significant turnaround in the energy sector, as the previous seven companies we took over had considerable arrears.
All industrial parks in Uganda are designed to have a dedicated transmission line. For example, Namanve Industrial Park has a transmission line that supplies electricity within the park, and on average, 80 percent of factories there have dedicated lines. Our goal is to ensure that if one line requires repair and maintenance, there is an alternative dedicated line to switch to.
But vandalism poses a problem for. Since we took over, we have recorded six cases of vandalism in Kololo, Nakasero, and the surrounding areas, including Nakulabye and Mengo. Vandals cut one or two meters of cable, leading to customer complaints about outages. We have engaged security and arrested 62 vandals, who have been charged under the new Electricity Act.
Power distribution involves significant infrastructure, including civil works that require careful planning, scoping, procurement, and execution. Even if you pay now, equipment manufacturing and delivery can take six months, regardless of whether you are a government or private operator.
However, we expect that in the first two years, the network will stabilise, overcoming the delays we experienced in the past three years due to our investment.
We have secured funding through both tariffs and lenders, including Absa Bank, which has provided us with a facility under UEDCL, bolstered by our creditworthiness and good governance.