Energy minister Ruth Nankabirwa has renewed the pledge by government to withdraw the management of the generation and distribution of power from private sector companies.
Earlier this year, President Yoweri Museveni said the cost of electricity in Uganda has remained high partly because of the private sector companies, which he called middlemen, hired to manage the electricity resources.
Currently, only the transmission docket is fully in the hands of the state-owned Uganda Electricity Generation Company Ltd, one of the three agencies formed when the utility parastatal, the Uganda Electricity Board was de-bundled under the Electricity Act of 1999. The Uganda Electricity Distribution Company Ltd hired out most of the distribution function to Umeme Ltd, while the Uganda Electricity Generation Company Ltd contracted companies like Eskom, Jacobsen, Electromaxx among others.
In a meeting with officials from UEGCL, Minister Nankabirwa indicated that the management of Kiira and Nalubaale hydropower dams will revert back to the government company, when the current concession held by Eskom runs out in three months’ time.
“I would like to re-echo the words of H.E Yoweri Kaguta Museveni to have middlemen out of the energy sector. The expiring concession contracts for the Nalubaale – Kiira Complex and Namanve Power Plant will not be renewed to help us manage the power tariff,” the minister said on Wednesday.
The State Minister for Energy, Okaasai Sidronius Opolot, supported UEGCL to take over the power plants. “I would like to commend UEGCL for building capacity that has enabled them to operate Isimba HPP, means they have the capacity to run the other power plants (Nalubaale and Kiira Power Complex and Namanve Power Station).”
However, Robert Kasande, the Permanent Secretary at the ministry, said there is no decision that has been taken whether to lock out private companies or not. Kasande notes that there is a feasibility study that is being conducted, with the aim of among others, finding ways of bringing down the cost of electricity.
Asked what would happen to the investments by the companies which are not yet recouped, Kasande said the regulator has a mechanism for dealing with that.
The other company facing uncertainty over their future in the sector is Umeme whose contract runs out in less than three years too, and the negotiations have dragged on for years now. Eskom which is managing Kiira and Nalubaale stations say that currently, they are focused on seeing out their concession.
“Our focus right now is to serve out the current concession and we will discuss any future plans when the time is right,” said Emmanuel Njuki, the Corporate Affairs Manager, Eskom Uganda.