The Uganda Electricity Distribution Company Limited (UEDCL) has signed a landmark $50 million (Shs195 billion) financing agreement with Absa Bank Uganda, marking a significant step toward upgrading and expanding the country’s electricity distribution network.
The deal, signed today at UEDCL Tower in Nakasero, Kampala, will run over five years and support initiatives aimed at enhancing electricity reliability and affordability.
The funding will facilitate network reinforcements, the construction of new electricity substations, and the rollout of smart grid technologies.
These measures are expected to reduce technical losses, unlock suppressed demand, and integrate renewable energy generation into the national grid by the end of 2026.
Board Chairperson Lydia Ochieng-Obbo described the agreement as timely, noting the network’s urgent need for investment.
She highlighted that the deal demonstrates strong private sector support for UEDCL and the government, while setting a benchmark for other public agencies to access private financing for critical infrastructure projects.
Managing Director Paul Mwesigwa emphasized that the facility will support the government’s broader strategy to achieve universal electricity access, improve reliability, and ensure affordability.
“This investment will strengthen the efficiency and resilience of Uganda’s electricity distribution system, further supporting the country’s economic growth,” Mwesigwa said during the signing ceremony.
He expressed gratitude to Absa Bank, as well as government stakeholders including Energy minister Ruth Nankabirwa and her Finance counterpart Matia Kasaija, for granting UEDCL a no-objection to the loan.
Mwesigwa noted that the Electricity Regulatory Authority (ERA) approved the loan within the tariff framework to promote self-sustainability of the distribution segment.
He also highlighted that the facility comes with a favorable interest rate of 8% (VAT inclusive), well below the prevailing market rate of 28% (VAT inclusive).
Absa Bank Uganda Managing Director David Wandera said the partnership underscores the bank’s commitment to long-term infrastructure financing across Africa.
“Reliable power distribution is fundamental to Uganda’s industrialisation, competitiveness, and inclusive growth," Wandera said.
"This facility reflects Absa Bank Uganda’s commitment to unlocking productivity and improving quality of life for communities across the country. By partnering with UEDCL at this critical investment stage, we are supporting a resilient, efficient, and future-ready power distribution network aligned with Uganda’s Vision 2040 and National Development Plan IV."
The agreement is expected to catalyze transformative improvements across Uganda’s electricity distribution sector, facilitating industrial growth, improving electricity access, and ensuring a more efficient and reliable power supply for communities nationwide.