To meet the ambitious targets of the Government of Uganda’s Electricity Connections Policy 2018-2027, Umeme Limited, Uganda’s largest power distributor, has today unveiled an equally ambitious USD83.3 million (Shs 310 billion) capital expenditure plan for 2020.
Addressing the media, Mr. Selestino Babungi, the power distributor’s Managing Director, said that the 2020 plan itself is part of a larger USD450m (Shs 1.7 trillion) 2019 and 2025 investment agenda, in support of Uganda’ four key national plans, namely: increasing grid connections, increasing demand, reliability of supply and driving efficiencies.
“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.
The 6 areas, according to Umeme are: “addressing energy losses and improve operational efficiency (USD 26.89 million); addressing load demand growth (USD22.72 million); power supply reliability (USD18.89 million); power generation evacuation and supply (USD10.79 million); network systems automation (USD1.93 million) and network protection and security (USD2.06 million).”
The UGX310 billion represents a 7.2 per cent increment or UGX21 billion from the UGX289 billion invested in 2019. In 2018 Umeme invested UGX230 billion into various distribution demand growth, supply reliability, and loss reduction projects.
Cumulatively, Umeme has to date invested over $650 million into the power distribution network, increasing the number of customers from by 1,210,000 customers from the 290,000 it inherited in 2005 to now 1,500,000 customers. Electricity power losses have also been reduced from 39.8% as of 2005 to 16.4% as of 2019.
The Government of Uganda’s Electricity Connections Policy 2018-2027 aims at scaling up access to power and clean energy throughout the country, achieving 60% access to electricity by 2027- up from the current 28 per cent. Access will then be increased to 80 per cent by 2040.
To achieve this, annual connections from all power distributors, must be ramped up to 300,000 while power generation needs to grow to 3,500 MW by 2025, and 41,000 MW by 2040. This will require maximum harnessing of Uganda’s hydroelectric power potential, estimated at 4,000 MW, largely along the Nile River as well as other potential energy sources, namely: geothermal (450 MW), solar (1,000 MW), and nuclear (30,000 MW).
Uganda’s power demand has been growing at an average of 9.1% annually.
On its part, in 2019 alone, Umeme which accounts for about 97% of all power distribution, increased its customers by 14 per cent, from 1,290,000 in 2018 to 1,470,000 in 2019, an increase of 180,000. Of these 178,152 were financed by the Government and development partners under the Electricity Connections Policy.
“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.
“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
Detailing where the money will be invested, Babungi said that USD26.27 million (UGX98 billion) will be invested in converting the remaining 150,000 customers to prepaid metering to address losses as well as improve operational efficiency in customer service.
“Every money saved in energy losses, our customers benefit directly by way of reduced cost of electricity,” Babungi said.
USD 9.23 million (UGX34.7 billion) will be sunk into evacuating power from the 16.5 MW Siti II Hydroelectric Power Station in Bukwo District, Eastern Uganda and another USD5.99 million (UGX22.5 billion) used to construct feeder powerlines the new Tangshan Mbale Industrial Park. This project also includes a new switching station to ensure effective power supply to the industries in the region.
Umeme is also investing USD3.4 million (UGX12.7 billion) into evacuating power from the new UETCL substation in Mukono to the Mukono Industrial Area as well as the almost complete National Water & Sewerage Corporation (NWSC) new water plant in Katosi, Mukono District.
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.
At a cost of USD1.82 million (UGX6.8 billion), the power distributor will also construct a switching station at Matugga on the northern outskirts of Kampala City to enable network reconfiguration and network operational efficiency around the Liao Shen Industrial Park, Kapeeka and the surrounding Bombo area. An additional USD1.66 million (UGX6.2 billion) will be spent on replacing the Bombo substation.
The company plans to invest USD1.93 million (UGX7.2 billion) in operational and network management systems to ease the services provision to its customers.
For Northern Uganda, USD1.56 million (UGX5.8 billion) is being 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 (UGX4.9 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 (UGX7.8 billion).
USD1.7 million (UGX6.3 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 in Entebbe at a cost of USD1.38 million (UGX5.1 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 (UGX6.7 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 continue powering Uganda’s progress and development,” said Babungi.