Uganda’s power demand increases by 17% as UMEME Chairman Bitature ensures the protection of shareholder value during the transition.

According to a 2024 report from the Uganda Bureau of Statistics (UBOS) Uganda’s population has grown to approximately 45.9 million, up from 34.6 million in 2014, as a result, the maximum power demand increased from 843.0MW in 2022 to 987.8MW in December 2023, representing a 17% growth rate resonating to an increase in the supply of power to different parts of the country.

As Umeme’s concession navigates through the final stages, The Chairman, UMEME Mr. Patrick Bitature has emphasized the need for a smooth transition of assets back to the Ugandan government.

He has reassured stakeholders that Umeme is committed to ensuring a seamless re-transfer process while protecting the interests of customers, staff, and shareholders aimed at protecting shareholder value and ensuring a stable transition from Uganda’s electricity distribution sector.

Uganda’s leading electricity distributor Umeme Limited chaired by Patrick Bitature however reported a 14.4-percent decline in shareholder equity for the first half of 2024

“As of June 30, 2024, shareholder equity had dropped to USh803 billion ($216 million), down from USh937 billion ($252 million) at the end of 2023. This decline is primarily due to financial challenges as the company approaches the end of its 20-year concession, set to expire on March 30, 2025” a statement partly reads.

The drop in equity is largely attributed to low profit after tax, which remained unchanged at USh13 billion ($3.5 million). Despite maintaining profitability, Umeme faced accelerated amortization of intangible assets. This increase in amortization, mandated by International Financial Reporting Standards (IFRS), saw the amortization charge rise from USh210 billion ($56 million) in 2023 to USh238 billion ($64 million) in the first half of 2024.

The increased amortization reduced Umeme’s total assets, which fell from USh2,347 billion ($656 million) in December 2023 to USh2,243 billion ($693 million) by June 2024. A decrease in capital investments further contributed to this asset decline.

Also Umeme managed to reduce its finance costs by 36.2 percent, dropping to USh16 billion ($4 billion) after repaying all term loans in December 2023, however, these gains were offset by a rise in the income tax charge, which increased to USh11 billion ($3 million) from USh3.5 billion ($941,824) in the same period in 2023. The higher tax liability was driven by performance on profit before tax.

The company’s net operating cash flow also fell sharply, decreasing from USh221 billion ($59 million) in 2023 to USh112 billion ($30 million) in the first half of 2024. This decrease was due to reduced payables and delays in government payments.

The Future Projections of electricity in Uganda with more dams set including Karuma dam will ensure additional power projects will be necessary to meet future demand. Projections indicate that without new initiatives, Uganda may face a demand-supply gap by 2028.

 The historical patterns and current statistics underscore the need for proactive planning and investment in new hydropower projects to sustain Uganda’s economic growth and ensure a stable power supply.