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Gov’t Permits Individual Payments for New Connections as Standoff with Umeme Drags On

Government has announced it will permit individuals seeking connection to the national power grid to pay for themselves if they can afford, rather than having to wait for free connection under the now suspended Electricity Connection Policy (ECP).

Cabinet sitting on Monday this agreed to “temporarily halt in the implementation of the connection subsidies to Consumers in cognizant of the constraints to the Budget.”

The cabinet then authorized the Minister of Energy and Mineral Development to “issue a Policy direction in the interim with effect from March 1st 2021 to authorize electricity connections to customers who have capacity to pay for them.”

Under the ECP program, Umeme has been getting funding from government to connect to the grid customers that need one pole or no pole, free of charge. Costumers only needed to pay Shs 20,000 for inspection of the premises for appropriate wiring and readiness for connection.

The company however, took a decision in July to suspend the program after government failed to fund it due to budget cuts.

At the time, according to reports, Umeme was owed up to $23 Million by the Rural Electrification Agency which is the government body implementing the program.

The suspension meant that thousands of Ugandans that needed to join the grid had to wait infinitely for the matter to be resolved.

In a bid to allow connections to carry on, government is now calling on individuals who can afford, to pay for their last mile connection.

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There was no clarity however, on whether government would eventually reimburse such people in the future once the program resumes.

It is understood that the idea of individual payments was suggested by Umeme during talks with the Energy Ministry in July.

Umeme also asked to be allowed to use its capital expenditure allocations to do new connections under ECP as the government and other donor funders find money.

Commenting on the latest development, Umeme Managing Director Selestino  Babungi said the company was “pleased with the new policy direction.”

“It provides an opportunity to serve customers willing to meet their connection costs without undue delays. We understand the constraints on the government fiscal resources due to the Covid 19 pandemic. We shall continue to wait for official communication and guidance by the Electricity Regulatory Authority on the implementation mechanism,” he said

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