News
UEDCL to spend shs43.3 billion in 9 months; says ERA Boss
The Uganda Electricity Distribution Company Limited (UEDCL) is set to use up to Shs43.3 billion (USD 118 million) in its operations over the next nine months, according to the Electricity Regulatory Authority (ERA). The revelation was made by ERA Executive Director Zilia Wako during the second generation of the Electricity Sector Bazaar held on Tuesday.
Wako explained that the funds were originally part of the Umeme buyout fund and will now be recovered by UEDCL through electricity tariffs. “The decision we have from Cabinet is that the USD 118 million that the government has paid as the buyout amount, has been given to UEDCL to recover through the tariff with interest and invest as seed capital,” Wako said.
Wako added that this has adequately set off UEDCL to seamlessly operate. Additionally, just like Umeme, the new distributor has also been provided for in the tariff. ERA, as the regulator, has provided for this in the tariff. They have weaned them off the breast; at UEDCL’s disposal for the next nine months, they have USD 100 million. “Umeme has not been able to reach that in any particular year,” she noted.
The Executive Director said, “They have this money to run, to restore, to upgrade, and make sure that the network is able to cope with the circumstances,” she emphasised. “They are going to be recovering like Umeme was, so they are going to be sustainable.”
She further noted that alongside this funding, the company has additional financial support from the World Bank Scale-Up Project, which includes the provision of renewable energy sources to social amenities like hospitals, schools, and health centres, especially in rural areas. It also includes connecting consumers who require no pole and those who need one pole to join the grid. “This 100 we are talking about doesn’t include the USD 683 million of the World Bank for accelerating electricity access, and we have a target to provide access for all by 2030,” she said.
With such funding, performance deliverables have been set for the new electricity distributor, mainly aimed at reducing electricity loss and achieving revenue collection targets. “In the next nine months, we expect the loss factor to reduce to 14.59 per cent. Next year, the loss target should reduce to 13.65 per cent, and the following year it should reduce to 13.31 per cent,” she revealed. “Revenue collection targets are set at 99.85 per cent, 99.855 per cent, and 99.8555 per cent, respectively, because we are on prepayment.”
To ensure prompt payment, especially from government agencies, she revealed that moving forward, these entities are going to be enrolled on prepaid metering, as is the case with other consumers in the country. “On the side of government, we are going to enroll them on prepaid, and we have discussed it with the PSST, and he is in agreement.”
Worth noting is that by the time of Umeme’s exit on 1st April 2025, electricity losses stood at 16 percent, with a revenue collection rate of 99 percent, worth UGX 2.5 trillion, with over 2 million connections, at an average of 100,000 new connections annually monetizing at least 84 percent of every electron received from Uganda Electricity Transmission Company Limited (UETCL).
Eng. Protaze Tibyakinura, the UEDCL Chief Engineering & Technical Services Officer, informed that though Umeme had operated the larger part, UEDCL has served the most difficult areas, so it is not new to the task and is ready to take on the challenge. “We have been distributing to up to 240,000 customers, and all of them are running on a prepaid metering system,” he noted. “The lessons learnt from there are good enough.”
He updated that in the first two weeks of the takeover, they have been focused on restoring what had been destroyed during the transition period. “For April, we have concentrated on restorations and addressing the outages that have been rampant, as well as connecting all the new connections that had certified all the requirements with Umeme and we will do it at no extra cost.”
Comments
