What next for Uganda’s energy future after Umeme?

Over the last two decades, Umeme played a pivotal role in delivering electricity to millions of Ugandans, but now, with the company’s exit from the power distribution sector, the government of Uganda faces a monumental task. What comes next?

In the quiet halls of government, Simon Giw D’Ujanga, former Minister of Energy, stands at the crossroads of history. “The worst is behind us,” he says with conviction, a phrase that resonates deeply within the country’s energy landscape. The once-dire shortage of electricity is now a thing of the past, with sufficient generation capacity in place.

“The President has strong confidence in this sector,” D’Ujanga continues, emphasizing that the government’s role is now to push forward, to expand the supply, and ensure that utilities reach every corner of the country—especially the most remote rural areas.

This moment of change marks a new beginning for Uganda’s energy sector. Umeme, after 20 years of service, is no longer in control of electricity distribution. The company’s departure is the culmination of a process that began back in the late 1990s, when the government made the strategic decision to open up the energy sector to private investors. The unbundling of Uganda Electricity Board (UEB) into generation, transmission, and distribution paved the way for companies like UMEME to inject private capital into the sector, helping to turn the distribution network into something financially viable.

But now, with UMEME’s exit, the government must shoulder the responsibility of improving the sector while keeping the momentum going. “It is the government’s responsibility to provide utilities and ensure they reach even the most rural areas,” D’Ujanga says. The question looms large: How will Uganda maintain and expand electricity access, especially in underserved regions, without the private capital that UMEME brought to the table?

One thing is clear: efficiency must be the priority. “UEDCL (Uganda Electricity Distribution Company Limited) needs to focus on improving efficiency rather than allowing wastefulness to continue,” D’Ujanga stresses. One of the key issues UEDCL must address is the problem of uncollected bills, which have plagued Uganda’s electricity distribution for years. With the government now in charge, a more rigorous approach to ensuring customer documentation and improving revenue collection must be implemented.

D’Ujanga’s words carry weight when he reflects on UMEME’s legacy. “UMEME’s contribution to the sector should not be underestimated. When they first came on board, we were experiencing a 30% commercial loss due to unpaid bills,” he explains. UMEME’s intervention brought with it a much-needed injection of capital, and through its efforts, the company helped turn the tide, cutting losses and improving the overall health of the sector. UMEME also expanded electricity coverage, which, just two decades ago, was a distant dream for many Ugandans. Today, access to electricity is widespread, though, as D’Ujanga acknowledges, more work remains.

The government’s next step is to build upon these achievements. For years, UMEME was often criticized for high tariffs, but D’Ujanga offers a nuanced perspective. “We once criticized UMEME for being expensive, but as a private sector entity, they had to account for the risks involved,” he says. Now, the government has an opportunity to strike a balance—ensuring affordable electricity prices while avoiding the risks that come with a private investor model. This delicate equilibrium will require strategic planning, investment, and a focus on reducing inefficiencies.

Looking ahead, UEDCL and the government must prioritize the long-term stability of the energy sector. While UMEME’s departure may raise concerns about potential disruptions, D’Ujanga remains optimistic. “If the figures are accurate, there shouldn’t be any issues with where UMEME has left off,” he states. Indeed, the country has made significant strides, and there is confidence that with proper management, the transition can be seamless.

However, Uganda must also address critical gaps in the sector. Despite the progress, many rural areas still suffer from intermittent power supply, and there are parts of the country that remain off the grid entirely. The government must continue investing in infrastructure, not only to expand the grid but also to improve the reliability of power in existing areas. This will involve upgrading old power lines, improving maintenance protocols, and ensuring that electricity generation and distribution remain robust even during times of high demand or adverse weather conditions.

In a world increasingly reliant on clean energy, Uganda must also embrace renewable energy solutions as part of its long-term strategy. The government should incentivize investment in solar, wind, and hydropower sources to complement the national grid, ensuring energy security for generations to come.

The task before Uganda is monumental, but the country is at a crossroads, with a unique opportunity to steer its energy future in a new direction. “The worst is behind us,” D’Ujanga reminds everyone, and indeed, it is a time for bold decisions and forward-thinking policies. The government’s next steps will determine whether the energy sector continues to grow and improve or falters in the face of new challenges. But one thing is certain: the era of transition is here, and Uganda’s energy future will be shaped by the decisions made today.