Every night, turbines at power plants keep spinning.
At Karuma, Isimba, and Nalubaale-Kiira, water rushes through concrete channels, turning steel rotors designed to power the future. Engineers monitor control panels, and operators log generation figures. On paper, Uganda appears well supplied with electricity.
But beyond the powerhouses, something quietly breaks down.
The electricity is generated. Contracts are honoured. Payments are made. But the power does not always reach the people. This is where the story of deemed energy begins.
In simple terms, deemed energy is electricity that is produced or contractually available to be produced but cannot be evacuated through the transmission grid.
When this happens, Independent Power Producers are still paid under their power purchase agreements.
The loss does not show up as blackouts or darkness on the streets. Instead, it appears in government’s financial statements as an obligation, money paid for power that was never used.
According to the Annual Report of the Auditor General 2025, unused power worth Shs26.94b was registered, which was incurred across all four quarters of the year ended June 2025.
The Auditor General traces the cost not to a lack of generation, but to failures in the network that lies between the power plants and consumers.
Grid interruption events repeatedly prevented electricity from being evacuated. Line faults, equipment failures, vandalism, system limitations, and transformer outages combined to restrict the flow of power at critical points in the system.
In substations such as Namanve, Mutundwe, Lugazi, and Owen Falls, major transformers worth billions of shillings remained idle for extended periods.
Some, the Auditor General indicates, had been out of service for months, others for more than three years.
These were not minor components. They were strategic non-current assets, but instead, they sat unused, forcing the system to rely on temporary and inefficient configurations.
The idle transformers symbolize delay and neglect or a misalignment between assets and purpose.
Infrastructure exists, but not in a condition or configuration that allows it to serve demand.
The persistence of these interruptions, the Auditor General notes, points to ineffective utilization and unreliable performance of key transmission assets.
This was not an isolated technical problem but a systemic weakness with recurring financial consequences.
This is where the idea that government is ‘paying twice’ moves from metaphor to measurable reality.
First, government invested heavily in building generation capacity. Karuma Hydropower Plant alone costs approximately $1.398b, while Isimba costs about $567.7m, both financed through loans.
These loans must be serviced regardless of how much electricity the plants actually deliver to consumers.
The result is a compounding burden, with the country servicing debt on underutilized assets, paying operating and maintenance costs, and then paying again for electricity that never enters the economy.
This describes inefficiency. Nowhere is this clearer than at Karuma Hydropower Plant. Designed with a declared available capacity of 600 megawatts, Karuma generated only 808.27 gigawatt-hours of electricity, equivalent to about 30 percent of its available capacity.
In its first year of operation, average dispatch was just 70 megawatt-hours, rising to 116 megawatt-hours in the second year.
Both figures fall far below the minimum required dispatch of 300 megawatt-hours needed to properly test equipment and identify latent defects during the defects liability period.
Low dispatch does not simply waste electricity; it undermines asset integrity. When turbines and associated plant structures are not run at sufficient load, defects may remain hidden until warranties expire.
The financial consequences are equally severe. Karuma realized only Shs148.16b, representing just 46.8 percent of its expected revenue of Shs316.42b.
This shortfall threatens the plant’s ability to meet loan repayment obligations and adequately fund operations and maintenance. What appears as unused power emerges as a risk of stranded debt.
Another crucial insight in the Auditor General’s findings is that deemed energy is not purely a transmission problem. It is also a demand problem.
Low dispatch at Karuma and Isimba is partly driven by inadequate electricity demand and the prioritization of lower-cost plants and private producers already on the capacity charge.
Even where transmission infrastructure is available, there are not enough large and consistent consumers to absorb the power being generated.
This shifts the discussion from engineering to development policy. Generation capacity has expanded faster than industrialization, rural electrification, export readiness, and regional power trade infrastructure.
Uganda has invested in supply without fully anchoring that supply in productive economic activity. The result is power without pull, electricity ready to flow, but with nowhere meaningful to go.
But President Museveni has previously said that instead of government worrying because of lack, it is better to be worried about available but unused power.
Deemed power signals deeper coordination failures between generation and transmission planning, between asset procurement and load growth, and between infrastructure ambition and actual consumption patterns in the economy.
Thus, the Auditor General notes that beyond restoring idle transformers, there should be a structured and deliberate plan to improve asset availability, prevent recurring outages, and enhance evacuation capacity while demand grows in parallel.
Without this, deemed energy will not only be an anomaly, but a risk, whereby each year of inaction locks in avoidable losses, increases long-term pressure on electricity tariffs, and reduces fiscal space for social services.
What makes deemed energy particularly dangerous is that it produces no visible crisis. The lights remain on. The grid functions.
The cost is hidden in accounting records rather than felt through power outages.
And so, each night, the turbines keep spinning.
They produce clean, renewable power full of promise, waiting for a grid and an economy that can fully absorb it.
Until idle transformers are restored, demand is deliberately grown, and transmission assets are aligned with national development goals, much of that promise will remain trapped.