Uganda Government launches new power connection credit system for customers

The Ministry of Energy and Mineral Development has launched a new power connection credit framework for customers.

The current connection fee of Shs730,000 charged by power distributor Umeme has been deemed too high by many applicants.

But the ministry says the hybrid electricity connection framework combines a customer contribution, a subsidy and credit to the customer that can be recovered from the customer’s energy bill in a period of eight years with no interest.

Speaking at the launch in Kampala on Tuesday, 13 December 2022, Energy Minister Ruth Nankabirwa said the system seeks to enable more than 200,000 applicants connected to the grid.

“We have listened to the cries of our people, and we have come up with a new initiative that will drive electricity connections. Customers will only have to make a down payment of Shs200,000 to be connected to power,” she said.

The program will be rolled out for Umeme Limited and the Uganda Electricity Distribution Company Limited customers as the piloting distribution companies.

“We have listened to the cries of our people, and we have come up with a new initiative that will drive electricity connections. Customers will only have to make a down payment of Shs200,000 to be connected to power,”

Energy Minister Ruth Nankabirwa

“This framework is sustainable given that it combines resources from the consumers, the Government, and the private sector relieving the heavy burden on both the Applicant and the Government,” the minister said.

The Government launched the Electricity Connection Policy (ECP), commonly referred to as the Free Connection Policy, targeting to increase annual domestic customer connections from 160,000 to 300,000.

However, Nankabirwa said most Ugandans are still not connected to the high cost involved. She said she hopes the new policy is embraced by Ugandans.

“Under this scheme, a customer is only required to meet the cost for the inspection of internal wiring and the initial units of electricity,” she said.

“This number of applications does not include the households that have been discouraged due to the backlog and therefore did not apply at all,” she added.

Ms Patricia Ojangole, Managing Director Uganda Development Bank Limited, said the availability of sustainable (reliable, affordable, and clean) energy is critical for economic growth, poverty reduction, as well as the social and cultural transformation of society.

“The Bank is aware of the low level of electricity access in the country, as well as the high connection costs. We have therefore come out to partner with players in the energy sector to promote the hybrid electricity customer connection credit framework which aims at enhancing electricity access,” he said.

Uganda still lags in energy access with 95 percent of the population living without clean cooking solutions where as 50 percent of health centres and 80 percent of schools lack electricity.