The company that has been distributing electricity in Uganda for the past 20 years, UMEME, has officially concluded its operations, and the government-owned Uganda Electricity Distribution Company Limited (UEDCL) has now taken over.
Background
The contract granting UMEME the distribution mandate was signed in 2005. Under the agreement, the Ugandan government held a 10% stake in the company. The government was also required to cover all costs if the contract was terminated before its expiry. However, the agreement stipulated that UMEME would be compensated up to $30 million if the termination was due to government action.
These terms were approved and signed by the then Minister of Energy, Irene Muloni , and the Minister of Finance, Maria Kiwanuka despite concerns over the contract’s financial implications. President Yoweri Museveni had previously expressed dissatisfaction with the deal.
Transition and Compensation Dispute.
After two decades, UMEME’s contract has ended, and its operations have been officially handed over to UEDCL. However, there has been a dispute over the compensation owed to UMEME.
Initially, Parliament approved $190 million for UMEME, but the Auditor General’s office later revised the figure to $118 million. UMEME has contested this, demanding over $200 million but the matter remains unresolved. The company has now handed over its responsibilities to UEDCL, which will manage electricity distribution moving forward.
Government’s Position
The Minister of Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa confirmed that $118 million has been set aside for UMEME, pending further negotiations for additional payments related to unfinished projects.
Nankabirwa urged UEDCL to work efficiently to avoid power disruptions and warned against vandalism of electricity infrastructure.
UEDCL’s Preparedness.
UEDCL has already secured $50 million to facilitate its operations. Nankabirwa emphasized that the government will continue to support the company as it takes over.
Patrick Bitature, a director at UMEME, acknowledged receiving $118 million but stated that the remaining balance will be pursued through further discussions with the government.
Paul Mwesigwa, the head of UEDCL, assured the public that the company is ready to address electricity challenges and has the necessary funds to execute its mandate.
New Electricity Tariffs
The Electricity Regulatory Authority (ERA) has announced revised electricity tariffs, with prices increasing by 14% in some categories.
UEDCL Begins Operations
As of 12:00 AM tonight UEDCL has officially commenced its operations, marking the end of UMEME’s 20-year tenure.
