More power to more people: Inside Umeme’s Shs 310 billion investment plans for 2020

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Mon 29 Jun, 2020

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Umeme Limited, last week announced it would invest a total of $83.3 million (Shs 310 billion) into Uganda’s electricity distribution network, saying that the plans would further solidify its plans to create increased access to reliable and clean energy for the people of Uganda.

According to an Umeme media statement, the 2020 investment plan that has received a nod from the Electricity Regulatory Authority (ERA), is a 7.2 per cent rise from the UGX289 billion the power company invested last year.

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“In 2020, Umeme, secured approval from the Electricity Regulatory Authority (ERA) and has gone ahead to allocate USD83.3 million to 6 critical areas of the business, which when completed, will see us reliably connect over 300,000 customers this year alone,” said Selestino Babungi, Umeme’s managing director.

Babungi said to date the company had invested in excess of $650 million (Shs2.4 trillion) and had planned a further $450 million between 2019 and 2025, when its current concession is expected to expire.

Government has said that the concession will be renewed at terms yet to be agreed.

“The Shs 310 billion we are announcing is part of a larger $450m (Shs 1.7 trillion) 2019 and 2025 investment agenda, that is is aimed at ramping national access to electricity and meeting Uganda’s development needs,” he said.

The money is to be invested in 6 strategic areas, namely: fixing energy losses and improving operational efficiency ($ 26.89 million); tackling increased load demand on the network ($22.72 million) and general improvement of power supply reliability ($18.89 million).

Umeme will also invest in evacuating and distributing power from two new generation facilities this year ($10.79 million); automating network systems (USD1.93 million) as well as network protection and security ($ 2.06 million).

Selestino Babungi, the Umeme managing director

The Government of Uganda, under its Electricity Connections Policy 2018-2027 that aims at increasing national access to reliable electricity from the current 28 per cent to 60% by 2027 and scale that up to 80 per cent by 2040.

To meet this challenge, the government of Uganda, development partners and other stakeholder like Umeme have set themselves a tough challenge to connect at least 300,000 new customers annually.

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

Babungi said that Umeme in 2019 alone, had connected 180,000 new customers out of whom 178,000 were financed by the Government of Uganda and development partners under the Electricity Connections Policy.

“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,” he said.

To date, Umeme has invested over $650 million into Uganda’s power distribution network and had, as a result, increased the number of customers on the grid by more than 5 times, from the 290,000 it inherited in 2005 to now 1,500,000 customers- an increase of 417.2 per cent. The company had also significantly reduced power losses from 39.8% in 2005 to 16.4% in 2019.

Details: the 15 key projects that Umeme is investing in

$27 million (Shs 98 billion) will be invested in converting the remaining 150,000 customers to prepaid metering to address losses as well as improve operational efficiency in customer service;

$ 9.23 million (UGX34.7 billion) will be sunk into evacuating power from the 16.5 MW Siti II Hydroelectric Power Station in Bukwo District, Eastern Uganda;

$ 99 million (Shs 22.5 billion) will be used to construct feeder powerlines to the new Tangshan Mbale Industrial Park. This shall also include a new switching station to ensure effective power supply to the industries in the region;

$4 million (Shs 12.7 billion) allocated to evacuating power from the new UETCL substation in Mukono to the Mukono Industrial Area as well as the almost complete National Water & Sewerage Corporation (NWSC) new water plant in Katosi, Mukono District;

$37 million will be spent on evacuation of electricity from the new UETCL Substation in Namanve to enhance power supply quality to the Kampala, Industrial Business Park (KIBP), Namanve;

$82 million (Shs 6.8 billion) has been allocated to constructing a switching station at Matugga on the northern outskirts of Kampala City to enable network reconfiguration and network operational efficiency around the Liao Shen Industrial Park, Kapeeka and the surrounding Bombo area;

$66 million (Shs6.2 billion) will be spent on replacing the Bombo substation;

$93 million (Shs7.2 billion) has been allocated to operational and network management systems to ease the provision of the services to its customers;

For Northern Uganda, $1.56 million (Shs5.8 billion) is being allocated to an evacuation line from the new Karuma Hydro Power Dam, to address demand growth in and around Gulu district.

Another $1.32 million (Shs4.9 billion) will be spent on reconfiguring the Gulu substation to supplement and improve the old substation infrastructure and address the overloading of the existing power transformers.

President Museveni commissions 9 factories at the Liao Shen Industrial Park in Kapeeka, Nakaseke District in December 2019.

In Kampala, Umeme is replacing the obsolete power transformers and switchgear at the Ntinda substation with new 33kV gear to address the quality of supply in the Ntinda area at a cost of $2.1 million (Shs 7.8 billion).

7 million (Shs 6.3 billion) will also be injected into a new substation in Nakawa, Kampala to address the growing power demand from housing developments and industrial areas in the Nakawa and Bugolobi areas;

In Entebbe, to meet the growing needs of the real estate sector as well as the ongoing Entebbe Airport expansion, a new substation is being built at Nakasamba SS at a cost of $1.38 million (Shs 5.1 billion);