UEDCL to absorb all UMEME staff in the planned takeover next year as buyout amount is yet to be determined.

Uganda Electricity Distribution Company Limited (UEDCL) submitted to Electricity Regulator Authority applications for licenses for the Distribution and Supply of Electricity for the Territory currently operated by Umeme Limited. The Authority is reviewing the adequacy of the Applications.

As Umeme Limited, continues to invest in Uganda’s electricity sub-sector, especially in the distribution and sale of electricity and tariff parameters, the Electricity Regulatory Authority said that the total amount for the buyout of UMEME is yet to be determined.

Though the process has gone through reviews, analysis and verifications to be able to advise the auditor general, ERA considered the investments made by Umeme Limited but the amount is a work in progress.

According to Uganda Electricity Distribution Company Limited (UEDCL), the transition process also involves absorbing the staff of UMEME as they plan to expand their operation in Uganda following the takeover.

The Managing Director of UEDCL Mr Paul Mwesigwa, assured current Umeme Limited staff of their job retention even after the takeover.

He said currently, UEDCL has about 500 staff yet; with the planned takeover of the Umeme Limited deal/territory, the required staff will be over 3000.

“Umeme has 2502 staff. That number will be absorbed fully and we shall recruit more because business is expanding. From April 1, Uganda except West Nile and Kalangala, will be covered by UEDCL” he said.

Mwesigwa added that in the 3-year tariff application period (2025-7), UEDCL has set up various post-UMEME targets among which includes expanding offices from current 64 to 100 across the country, cover more districts from 102 to 137, distribution loss reduction at 15.2%, revenue collection rate at 99.7%, improve power reliability by 90% and energy access to 300000 new customers per year.

“Our desire is to ensure a smooth process. We don't want any customer to feel that on March 31 2025, there was even a change in management. Everything should be smooth. We therefore, request ERA to grant UEDCL the opportunity to sell and distribute and also request ERA to approve our revenue requirement as at April 1 2025” he said.

Among the investments of UMEME Limited under the Chairmanship of Businessman Dr. Patrick Bitature include 39.2 percent shares listed on the Uganda Securities Exchange held by Ugandans and another 7 percent by East Africans. Africans hold 23.6 percent, while the rest, 30.1 percent are held by international investors.

As at the end of the year 2023, Umeme’s made revenues totaling 2.2 trillion Shillings and a net profit of 11.5 billion, while its total assets amounted to 2.35 trillion.

The Electricity Regulatory Authority (ERA) Chief Executive Officer, Eng. Ziria Tibalwa Waako, said that although there is a working figure, this is inconclusive because Umeme Limited continues to invest in the network until the last date of the expiry of its contract, as per the agreement.

Meanwhile, ERA board chairperson Dr. Sarah Wasagali Kanaabi commended the public for participating in the public engagement regarding UEDCL’s application. She however, said their views will be taken into account by management before a decision is taken on UEDCL license application. She commended Umeme for the years they have been in Uganda.

Umeme Contract according to the concession agreement is meant to expire on March 31 2025,

UEDCL which is fully owned by the government will have to invest Shs849bn into the network, especially on its infrastructure including replacing distribution transformers which according to UEDC is at 36.7% of them have surpassed the lifetime of 30 years with some transformers having served for 80 years, replacing 10% of the utility poles on the network among other investments.

UEDCL has planned a 3-year budget of Shs 4 Trillion for the new investments, maintenance, and payment of loans although UEDCL doesn’t get money from the Consolidated Fund, but internal and external financiers.

If the application to takeover Umeme Limited is granted by ERA UEDCL which is owned 100% by the government add UMEME to other private companies they have taken over such as Ferdisult (Tooro area), Bundibugyo Electric Company services (BEC), PACMECS (Acholi-Karamoja area), Kilembe Investments Limited (Kasese area) and KRECS which was operating in Mubende, Kayunga areas.