Following approval from the Electricity Regulatory Authority (ERA) Umeme Limited, Uganda’s largest power distributor, has revealed that it is this year investing USD83.3 million (Shs 310 billion) investment plan to increase grid connections, as well as better the reliability of power and service to its customers.
The plan is also to align with the government’s Electricity Connections Policy (ECP) 2018-2027, which targets to increase access to electricity from the current 28 per cent to 60 per cent by 2027 and then 80 per cent by 2040.
In December last year, Umeme, secured some USD70m (UGX258 billion) funding from the International Finance Corporation (IFC), Stanbic Bank Uganda Limited, Standard Chartered Bank and the Dutch Development Bank (FMO) to invest in to support planned investments in the electricity distribution network.
Addressing the media yesterday, June 29th, 2020, Selestino Babungi, Umeme’s Managing Director, said that UGX 310 billion that is being invested this year, is part of a larger USD450m (Shs1.7 trillion) 2019-2025 investment agenda.
“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 Babungi.
According to the statement, the 6 areas include addressing energy losses and improve operational efficiency for USD 26.89 million; addressing load demand growth at a cost of USD22.72 million) and improving power supply reliability at USD18.89 million. It also involves the evacuation and supply of electricity from various generation facilities across the country (USD10.79 million), network systems automation (USD1.93 million), and network protection and security (USD2.06 million).”
Babungi said that the Shs310 billion is a 7.2 per cent increment or Shs21 billion from the Shs289 billion spent in 2019. Cumulatively, Umeme has to date invested over $650 million into the power distribution network, increasing the number of customers by 1,210,000 from the 290,000 it inherited in 2005 to now over 1,500,000 customers. He also said Umeme had reduced power losses from 39.8% as of 2005 to 16.4% as of 2019.
“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.
Last year, Umeme connected 180,000 new customers, 178,152 of whom financed by the Government of Uganda and development partners under the Electricity Connections Policy.
“Umeme would like to reassure especially our government stakeholders that we are committed to supporting the government of Uganda’s agenda of modernising her people, create jobs, and increase household incomes through provision of efficient electricity distribution services,” said Babungi.
Supporting industrialisation with reliable power
Diageo to Exit East African Breweries as Asahi Takes ControlThe bulk of the money- USD26.27 million (Shs98 billion) will be spent on converting the remaining 150,000 -200,000 post-paid customers to prepaid metering (yaka) to further reduce energy losses and improve on customer service.
Umeme will also invest USD 9.23 million (Shs34.7 billion) to evacuate power from the soon-to-be-finished 16.5 MW Siti II Hydroelectric Power Station in Bukwo District, on the Eastern borders of Uganda. An additional USD5.99 million (Shs22.5 billion) has been allocated to building a feeder line to Mbale’s Tangshan Industrial Park.
USD3.4 million (Shs12.7 billion) has been allocated to improving power in the Mukono Industrial Area as well as extending reliable power to National Water & Sewerage Corporation’s (NWSC) new water plant in Katosi, Mukono District. The plant is scheduled to go live in February 2021. A further USD2.37 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.
To further support industrialisation efforts in the country, at a cost of USD1.82 million (Shs6.8 billion), a switching station will be built at Matugga on the northern outskirts of Kampala City to improve power reliability at the Liao Shen Industrial Park, Kapeeka and the surrounding Bombo area. An additional USD1.66 million (SHS6.2 billion) will be spent on replacing the Bombo substation.
The company also plans to invest USD1.93 million (SHS7.2 billion) in operational and network management systems to ease the provision of the services to its customers
For Northern Uganda, USD1.56 million (SHS5.8 billion) has been allocated to an evacuation line from the new Karuma Hydro Power Dam, to address demand growth in and around Gulu district. Another USD1.32 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.
In Kampala, Umeme is replacing what it says is 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 USD2.1 million (SHS7.8 billion). USD1.7 million (SHS6.3 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 USD1.38 million (SHS5.1 billion).
Other projects include USD1.81 million (USD6.8 billion) to be injected into network refurbishment in Njeru Municipality, Jinja district, as well as USD1.8 million (SHS6.7 billion) allocated to injecting new transformers in the network across the country.
“Umeme supports the government of Uganda’s post-Covid-19 recovery strategy of import substitution. Our investment plans are a further confirmation of our commitment to Uganda and the people of Uganda that we are proud of the journey we have walked with them thus far and are looking forward to continuing powering Uganda’s progress and development,” said Babungi.
