President Yoweri Museveni has directed energy minister, Irene Muloni, to explain why Umeme’s power distribution energy losses are high despite increased investment in the network.
Umeme’s power distribution concession will be expiring in seven years and the company has expressed interest in having it extended. However, President Museveni has ruled out renewing the electricity distributor’s contract.
Distribution energy losses are currently sitting at 17.2%, down from 19% two years ago.
The Daily Monitor reported that Museveni said due to energy losses, electricity consumers are paying 26% higher.
This is said to be in the case of domestic consumers, who are now required to pay more for power. Read more: Umeme proposes lifeline tariff increase
“I am now directing you to furnish me with the explanations on all these matters,” the President said in a letter addressed to Muloni.
“In the meantime, there should be no question of renewing Umeme’s concession. By copy of this letter, I am also directing the [Inspector General of Government] to look into these issues,” his letter stated.
Uganda should instead look for “a cheaper way of modernising and expanding the distribution and distribution lines,” he said.
Investment in power distribution network
The Daily Monitor reported that the Uganda Electricity Distribution Company Limited (UEDCL) was pushing for a Chinese firm, whose name UEDCL did not reveal.
UEDCL managing director, Joseph Katera, noted that the government should invest more of “its own money” in the network.
That money, according to a source, was to be provided by a Chinese firm, who would then buy out Umeme’s depreciated investment at the end of the concession in 2025.
It was reportedly against this background that Umeme had as of 2017 started engaging key policymakers to lobby for an extension, arguing that it is better placed than any company to distribute power in Uganda.