The government has officially reaffirmed its full preparedness to take over the electricity distribution business from UMEME Ltd through its agency the Uganda Electricity Distribution Company Limited (UEDCL) starting April 1, 2025.
This move marks a historic shift in the country’s power sector with the government set to reclaim full control over electricity distribution for the first time in decades.
The Ministry of Energy and Mineral Development (MEMD) released a press statement today emphasizing that the transition is on course with key financial, operational and staffing preparations already in place.
The Ministry of Finance, Planning and Economic Development is finalizing a $50 million internal borrowing plan to support UEDCL’s capital investments ensuring that the state-owned agency is well equipped to handle service delivery after UMEME’s exit.
UMEME electricity distribution franchise signed in 2005 a 20-year agreement that granted the private company exclusive rights to manage, distribute and supply electricity across Uganda.
While UMEME has been credited with some improvements in the electricity sector, the government has long criticized the high cost of electricity, billing inefficiencies and unreliable power supply under its management.
By reclaiming the business, the government aims to reduce electricity tariffs for consumers, improving service reliability by eliminating private profit motives, ensuring cost effectiveness through streamlined operations and to enhance state control over Uganda’s power distribution sector.
The government has also assured UMEME that its buyout claim for unrecovered capital investments will be honored.
The Parliament of Uganda is in the final stages of approving the compensation package which UMEME has requested for infrastructure investments that have not yet yielded returns.
This decision, the Ministry insists is meant to honor contractual obligations and ensure a smooth transition rather than creating legal disputes.
With UEDCL set to take over, staffing concerns have been raised especially regarding job security for UMEME employees.
The government has acknowledged the ongoing power reliability issues affecting consumers promising that UMEME must continue fulfilling its obligations until March 31, 2025.
Meanwhile, UEDCL is already working on corrective measures to address power supply concerns immediately after the official handover in April.
