Did Uganda Really Need Umeme? Unpacking Two Decades of Power Distribution
With the end of Umeme’s 20-year concession on March 30, 2025, Uganda’s electricity distribution officially shifted to the Uganda Electricity Distribution Company Limited (UEDCL) on April 1. As the country enters a new energy era, questions resurface: Was Umeme necessary? What legacy does it leave behind?
Why Umeme Came In: A Power Sector in Disrepair
In 2005, Umeme inherited a crumbling distribution system:
- Just 250,000 customers
- Over 38% energy loss
- A sparse 17,000 km network
- A dismal collection rate below 80%
According to former ERA CEO Eng. Dr. Frank Ssebowa, the sector was in such disarray that goats roamed substations and asset data was unreliable. “We didn’t even know how many clients we had,” he admitted.
Umeme’s entry was a strategic move to professionalize the sector, attract financing, and bring in private sector efficiency.
What Umeme Delivered
By the time Umeme handed over the reins:
- The customer base had grown to 2.25 million
- Energy losses were slashed to 16%
- The network expanded to over 44,000 km
- Collection rates hit 99–100%, thanks to prepaid Yaka meters
- Annual revenue rose from UGX 160 billion to UGX 2.5 trillion
Transformation capacity also increased from 550 MVA to 2,500 MVA, and the number of transformers grew from 5,000 to 17,000.
“We’ve supported Uganda’s economic and population growth through reliable energy,” said Blessing Nshaho, Umeme’s Chief Corporate and Regulatory Officer.
But at What Cost? Government Criticism and the Profit Debate
Despite operational success, President Museveni remained a vocal critic. He accused Umeme of chasing profits over national interest, blaming the company for high electricity tariffs that stifled industrial growth and job creation.
“Umeme became a middleman between generation and the people,” Museveni argued during his 2021 Labour Day address. He opposed Umeme’s 20% return on investment, calling it unsustainable for Uganda’s industrial ambitions.
The government ultimately opted not to renew the concession, with Museveni pledging to supply power to industrial parks directly, bypassing Umeme entirely.
The Road Ahead: UEDCL’s Challenge
The biggest challenge facing UEDCL isn’t talent—it’s financing.
Ssebowa noted that while some experienced engineers from Umeme have transitioned to UEDCL, mobilizing capital without the same private-sector pull might prove difficult.
“Banks used to lend to Umeme confidently. Whether that confidence transfers to UEDCL remains to be seen,” he said.
The government recently rushed to borrow $50 million for UEDCL’s operational boost—a reminder of the pressing financial hurdles.
A Sector Transformed but Still Evolving
Uganda’s electricity sector has been ranked as the best regulated in Africa since 2018 by the African Development Bank—a recognition that acknowledges collaboration between regulators, Umeme, and other stakeholders.
Despite initial tensions, both sides now acknowledge that Umeme professionalized and upgraded Uganda’s energy infrastructure.
“The system we’re handing over is far more robust than what we inherited,” Nshaho said.
“The journey wasn’t perfect, but we’ve come a long way,” added Ssebowa.
Conclusion:
Uganda needed Umeme in 2005. The question now is whether UEDCL can maintain and build on the foundation laid—without repeating the inefficiencies that once crippled the sector. The next chapter in Uganda’s power story is just beginning.
