Loan, power outage and government’s promise, as Umeme sits in the departure lounge
Kampala, – Umeme is now of the departure lounge as it prepares to exit Uganda. This will mark an end to Umeme’s 20-year tenure in Uganda’s electricity sector. Umeme Limited became Uganda’s main electricity distribution company, operating under a 20-year concession that ended in March 2025. Umeme a subsidiary of Umeme Holdings, owned by Actis Infrastructure, had an initial investment of 50 Million USD.
As the clock ticks closer to April 1, 2025, the Ministry of Energy and Mineral Development (MEMD) has reaffirmed its readiness to assume control of the electricity distribution concession from Umeme Ltd, a role that will be undertaken by the Uganda Electricity Distribution Company Limited (UEDCL). This is according to a press release seen from the Ministry of Energy and Mineral Development (MEMD) . The press release read in part “The Ministry of Energy and Mineral Development (MEMD) wishes to reaffirm the Government’s full readiness to take over the electricity distribution concession from Umeme Ltd through its agency the Uganda Electricity Distribution Company Limited (UEDCL) come April 1, 2025”
Umeme’s concession, which expires on March 31, 2025, will not be renewed as part of the government’s strategy to stop duplication through the reclaim and reassigning of expiring distribution licenses from private firms. UEDCL has been officially handed the electricity distribution license to replace Umeme, ensuring continuity in service delivery. The transition is part of a broader effort to modernize and expand Uganda’s electricity infrastructure, with an ambitious targets to lock ever household by 2030 to the national grid.
Accordingly, Ministry of Finance is in the final stages of locking $50 million through internal borrowing to support UEDCL’s capital investments. This funding is expected to be available by the end of March, ensuring UEDCL is financially equipped to improve service quality. Additionally, Parliament is nearing approval of the buyout amount for Umeme, which has increased to $201 million as of February 2025. If approved, this amount will cover Umeme’s unrecovered investments, crucial for a smooth transition.. The buyout is set to cost the tax payer $201 million (as of February 2025). According to reports, Umeme invested approximately $800 million over 20 years .
As part of its readiness UEDCL aims to enhance efficiency and avoid duplication of roles. Despite assurances of job security, there have been concerns about inevitable job losses due to overlapping duties between Umeme and UEDCL. The recruitment process has been described as fair and merit-based, prioritizing operational efficiency
However, the transition period has been marked by frequent power outages, attributed to the changeover and operational constraints. The Electricity Regulatory Authority (ERA) Chief, Ziria Tibalwa, has expressed concerns about the government’s readiness, citing delays in securing necessary investments and operational challenges. Despite these challenges, the Ministry of Energy remains committed and has emphasized UEDCL’s preparedness to address any initial hurdles post-April 1, 2025.
Apart from the planned investment in grid expansion to every household , the ministry of Energy is promising operational efficiency, seamless handover of responsibilities, and maintaining continuity in electricity services and advancing Uganda’s electrification goals. Ugandans remain keen to see if the seamless transition will be achieved.
