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Umeme raising the stakes, unveils $83.3m energy policy delivery plan

To meet the Government of Uganda’s Electricity Connections Policy 2018-2027, the country’s power distribution company Umeme unveiled an $83.3 million capital expenditure plan for 2020.

Umeme’s managing director, Selestino Babungi, advised media that the 2020 plan is part of a larger $450 million 2019 and 2025 investment agenda.

This plan is in support of Uganda’ four key national plan, namely: increasing grid connections, increasing demand, reliability of supply, and driving efficiencies.

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“In 2020, Umeme secured approval from the Electricity Regulatory Authority (ERA) and has gone ahead to allocate $83.3 million to six critical areas of the business, which when completed, will see us reliably connect over 300,000 customers this year alone,” said Babungi.

According to the power company, the six areas and amounts allocated are:

  1. addressing energy losses and improve operational efficiency ($26.89 million);
  2. addressing load demand growth ($22.72 million);
  3. power supply reliability ($18.89 million);
  4. power generation evacuation and supply ($10.79 million);
  5. network systems automation ($1.93 million); and
  6. network protection and security ($2.06 million).

Umeme progressively meeting targets

To date, the company has invested over $650 million into the power distribution network.

It has increased its customer base by 1,210,000 customers, from the 290,000 it inherited in 2005 to now 1,500,000 customers. Electricity power losses have also been reduced from 39.8% as of 2005 to 16.4% as of 2019.

Umeme has invested over $650 million into the power distribution network.

“With the new capital investments we expect to boost our new customer connections to about 250,000- 300,000 per year, while at the same time investing in leveraging technology and business process improvements to reduce power losses and continue delivering more reliable power affordably,” said Babungi.

The Electricity Connections Policy 2018-2027 aims at scaling up access to power and clean energy throughout the country, achieving 60% access to electricity by 2027 – up from the current 28%. Access will then be increased to 80% by 2040.

Power generation to meet demand

To achieve the targets, annual connections from all power distributors must be ramped up to 300,000, while power generation needs to grow to 3,500MW by 2025, and 41,000MW by 2040.

This will require maximum harnessing of Uganda’s hydroelectric power potential, estimated at 4,000MW, largely along the Nile River as well as other potential energy sources, namely: geothermal (450MW), solar (1,000MW), and nuclear (30,000MW).

power generation needs to grow to 3,500MW by 2025

Uganda’s power demand has been growing at an average of 9.1% annually.

“Umeme would like to reassure, especially our government stakeholders, that we are committed to supporting the government of Uganda’s agenda of modernising her people, create jobs, and increase household incomes through provision of efficient electricity distribution services,” said Babungi.

From our archives: Geoffrey Bakka; Secretariat at GET FiT Uganda discusses the country’s electrification targets and the current investor climate.
Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.