The Uganda Electricity Distribution Company Limited (UEDCL) is gearing up to enter the debt market to fund the acquisition of assets from electricity distribution firm Umeme Ltd as its concession is set to expire in March 2025. UEDCL plans to borrow $255 million for the Umeme buyout and an additional $210 million to expand the existing network to meet the growing demand for power. The utility aims to generate revenue growth of Ush4.02 trillion over the next three years, alongside investments in non-network areas and operational costs.
UEDCL is securing loans at low interest rates to ensure that the end-user cost of power remains unaffected. The sector regulator has set challenging targets for energy distribution losses and new connections. Despite Umeme’s investments in the network, there are infrastructure defects that require attention. With Uganda’s increasing power demand, there is a pressing need for more investment and expansion in the electricity sector.
UEDCL’s application to assume Umeme’s assets aligns with the government’s efforts to streamline agencies in the energy sector. The move has faced scrutiny from stakeholders, but UEDCL remains focused on enhancing the power distribution network for the benefit of consumers across the country.