The Chief Executive of the Electricity Regulatory Authority (ERA), Ziria Tibalwa, has raised concerns about the government's preparedness to assume responsibility for electricity distribution after the expiration of Umeme's concession in April.
The primary challenge, according to Eng Tibalwa, lies in the delays in securing the $50 million (Shs185 billion) initial investment required by Uganda Electricity Distribution Company Limited (UEDCL) to step into the role currently held by Umeme.
Eng Tibalwa made the remarks during a session with Parliament’s Committee on National Economy, where she was discussing the $190 million (Shs700 billion) loan from Stanbic Bank Uganda to finance the buyout of Umeme.
"We aren’t even ready with the $50 million for UEDCL to start, yet the concession agreement wouldn’t allow UEDCL to step in," Tibalwa said, expressing concern about the feasibility of the transition.
She further explained that the government’s engagement with new contracts is part of an ongoing learning process, acknowledging the necessity for more flexibility in the handling of the concession.
She suggested that UEDCL could have begun working in collaboration with Umeme, investing in the network well before the concession's expiration.
The current arrangement has been fraught with challenges, particularly as Umeme’s contract nears its conclusion on March 31, 2025.
This has led to several parts of the country experiencing frequent power outages, which, according to Energy Minister Ruth Nankabirwa, are to be expected during this transition period.
Eng Tibalwa attributed the recent power blackouts to the clauses in the Umeme concession agreement that prevent the government from intervening until the contract's official end.
She pointed out the operational difficulties, stating, “Why is Umeme investing at the last minute? It is because they operate a live network.”
The ERA boss elaborated on the impact of these issues, citing examples of recent outages, including vandalism and equipment failures in Western Uganda and Entebbe.
Eng Tibalwa said had Umeme not acted, the situation would have worsened.
'Job losses inevitable'
Meanwhile, Minister Nankabirwa acknowledged the inevitable job losses among Umeme employees as part of the transition process.
As government takes over the electricity distribution role, Nankabirwa told the legislators that some Umeme staff would be redundant due to the overlap in duties with UEDCL.
“The workers of Umeme, their applications were rejected," she said. "The objective of restructuring was to remove duplication and enhance efficiency.”
The minister said where staff roles overlap between Umeme and UEDCL, some employees would lose their positions, a situation she described as unavoidable.
As Uganda prepares for the transition, the government faces a series of complex challenges, including securing necessary investments and ensuring a smooth handover of responsibilities.