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Umeme Makes Big Promises at Public Hearing for Contract Modification

The Electricity Regulatory Authority (ERA) on Friday held a public hearing for the licence modification for power distributors Umeme.

The company is hoping to have its contract modified for the remainder of its 20 year concession.

The Umeme concession agreement to distribute power to Ugandans ends in 2025.

The company recently applied for the review and modification of its current license for supply of electricity, to provide the performance parameters for the next 7 years as per the ERA regulations.

In the new application, Umeme promises to increase the number of connected customers from the current 1.3m to 2.7m people in 2025, increase the electrify network from 33,000km to 58,177kms and energy sales from 3,000 Gwh to 4,856Gwh.

The also vowed to cut the energy losses from 16.5% in 2018 to 14.3% in 2025

Umeme further proposes to reduce the average operating costs for each customer from US$43.7 to US$32.7 in 2025 which will in the end reduce the average operating costs hence reducing the final cost of power.

According to the Umeme MD, Selestino Babungi who made a presentation on behalf of UMEME,  the company has contributed significantly to the energy sector since it was contracted in 2005 with improvements in power losses, connectivity and customer satisfaction.

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Babungi says there has been an increase in the number of customers connected to the national grid from 0.29m people in 2005 to 1.3m people in 2018, exceeding the 1m targets by ERA. Energy losses have reduced from 38% to 16.5% while the distribution transformers have increased from 5,731 in 2005 to 11,909 in 2018

“The power loss is currently the lowest in East Africa Region. In 2017 Kenya stood at 18.9 while Tanzania was at 19.6%. We intend to improve this to at least 14% in 2025” he said.

According to the MD, the biggest challenge had been lack of support from the public on reporting power theft especially in rural areas.

Some of worst distribution losses have been incurred in Mbale 41%, Nakulabye 31% Najjanankubi 27%, Masaka 23% while industrial areas like kasese 5%, Kampala Metro 6% Kitintale 7% and mukono 9% have the least losses.

The public hearing which took place at Imperial Royale Hotel was attended by consumer bodies’ representatives, members of Parliament, Electricity Regulation bodies and consumers.

These raised issues including unreliability of power, high costs of power, fake bulk meters and the fact that allowing UMEME to make investments in the next years may force government to extend its contract once it expires in 2025.

The Executive director ERA, Ziria Tabalwa Waako who was the Presiding officer for the hearing said the public hearing is intended to review the past performance of UMEME and also set targets for 2019 to 2025.

“It is also intended to give a platform to all stakeholders in the energy to give their views and see how electricity service delivery can be improved” she said

She added “UMEME has been doing a good job according to what they presented today. However as the overseers of the sector, we want to ensure that our customers are protected and receive value for their money hence the reason to why we are engaging all the stallholders in these meetings”

UMEME is owned mostly by the National Social Security Fund (23%) as well as 5700 Ugandan shareholders. The company also depends on International funds who contribute 27%

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