HomeRegional NewsEast AfricaUS$190 million loan for Ugandan electricity distributor

US$190 million loan for Ugandan electricity distributor

Ugandan power distributor Umeme is using a US$190 million loan to fund a country-wide system upgrade in preparation for several new power generation projects that are expected to come on-stream in the next few years. This funding, the largest private sector corporate funding to date in Uganda, will support Umeme’s US$440 million capital investment program to cope with rising demand and cut energy losses.

Umeme chairman Patrick Bitature says, “The loan is a milestone for the energy sector which has never seen anything of this magnitude invested in the distribution network.” Umeme is a unit of UK private sector equity investor Actis LLP. It buys power from Uganda Electricity Transmission Company for distribution to domestic, commercial and industrial users. The funding is being provided by the International Finance Corporation, Standard Chartered Bank and South Africa’s Standard Bank.

A number of hydro power projects in Uganda, including Sinohydro’s 600 MW Karuma hydro power plant and China International Water and Electric’s 185 MW Isimba power plant, are expected to come on-stream in the next half decade.

Uganda has seen an improvement in its electricity supply following commissioning of the 250 MW Bujagali hydroelectric power station and Uganda may even start exporting power in the region when large-scale Chinese-funded power projects come on-stream.

Umeme’s planned upgrade could help reduce losses to the agreed regulatory target of 23% of energy purchased from 26.1% recorded in 2012.