Electricity distributor Umeme Limited to spend US$83m on electricity distribution project

UGANDA – Umeme Limited, Uganda’s sole electricity distributor, plans to spend USh310 billion (US$83.27 million) on electric power distribution project this year to boost grid capacity and quality.

The investments will help the firm distribute more power from a new hydropower plant being built by Chinese firm Sinohydro on the Nile river, which is scheduled to be completed in the first quarter of 2021.

This was revealed by Selestino Babungi, the company’s Chief Executive Officer (CEO). Mr. Babungi said that company has already secured approval for the project from the Electricity Regulatory Authority (ERA).

They intend to focus on six key areas i.e. addressing energy losses and improving operational efficiency, addressing load demand growth, improving power supply reliability, boosting power generation evacuation and supply, improving network systems automation and beefing up network protection and security.

“We need to increase the network capacity to deliver this power to end users,” Umeme CEO Selestino Babungi told a news conference.

This project is in support of Uganda’s Electricity Connections Policy 2018-2027 which aims at scaling up access to power and clean energy throughout the country from the current 28% to about 60% by 2027 and to 80 percent 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, such as geothermal, solar, and nuclear, which are about 450 MW, 30,000 MW, and 1,000 MW respectively.

The Umeme Limited CEO said that upon completion the project will enable the company to reliably connect about 250,000- 300,000 customers to the national grid per year.

Umeme Limited accounts for about 97 percent of all electricity used in the East African country.

The East African nation has sufficient power supplies, but consumers routinely suffer from outages caused by breakdowns along the aged and fragile distribution infrastructure.

Umeme, which is listed on both the Ugandan and Kenyan stock exchanges, will construct new, high voltage lines and switching stations to make power supplies more stable, Babungi said.

When Karuma comes online, it will increase Uganda’s generation capacity to more than 1,800 megawatts. The government plans to drive up access to electricity to 60% of the population by 2027 from the current 25%.

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