MPs probe UEDCL’s low investment after Umeme takeover

KAMPALA — Parliament’s Natural Resources Committee has questioned whether the Uganda Electricity Distribution Company Limited (UEDCL) was adequately prepared to take over the country’s electricity distribution network from Umeme, citing low investment, rising energy losses and weaknesses in the utility’s leadership.

The committee, chaired by Kazo County MP Dan Kimosho, raised the concerns during a meeting with UEDCL management, including Acting Managing Director Joselynne Rwakakooko, and State Minister for Energy Sidronius Okaasai Opolot.

At the centre of the MPs’ concerns was the disparity in investment between Umeme’s final years as the distributor and UEDCL’s preparations for the takeover.

Figures presented to the committee showed that Umeme invested about $72 million in 2021, $34 million in 2022, $23 million in 2023 and nearly $10 million in 2024.

This brought Umeme’s investment during the final five years of its concession to about $132 million, equivalent to roughly Shs490 billion.

UEDCL, by comparison, has invested about $1.5 million, or approximately Shs5 billion, since taking over the network, including expenditure on new connections.

The figures prompted MPs to question why government did not make greater investments in UEDCL before the concession ended, despite knowing for years that the company would eventually have to assume responsibility for electricity distribution.

Committee members questioned how UEDCL could be expected to deliver the same level of efficiency as its predecessor when it inherited a network that had benefited from substantially higher levels of investment.

UEDCL Chief Finance Officer Jacqueline Kiwanuka told MPs that government had planned to provide funding to enable the utility to prepare for the transition, but the resources did not materialise as initially anticipated.

She said UEDCL subsequently sought permission to borrow and secured financing after taking over the distribution network.

The explanation, however, did not satisfy the committee, which sought clarification from the Ministry of Energy and Mineral Development and the sector regulator on the management of funds that could have been used to prepare UEDCL for the takeover.

MPs said documents before the committee indicated that some funds were available shortly before the transition but were allegedly directed to be placed in a fixed deposit account to earn interest instead of being immediately invested in the electricity distribution network.

The committee said it would investigate the circumstances surrounding the decision and summon former UEDCL Managing Director Paul Mwesigwa and the regulator to explain how the funds were handled.

Losses rise after handover

The concerns over UEDCL’s preparedness come as electricity distribution losses have increased since the handover.

UEDCL officials told MPs that energy losses had risen to about 18.5 per cent, compared with approximately 15 per cent at the time the network was handed over by Umeme.

Acting Managing Director Rwakakooko told the committee that every percentage point of annualised energy losses represents about $7 million, equivalent to roughly Shs25 billion.

At the current loss level, the increase therefore represents a significant financial burden for the distributor and ultimately puts pressure on the wider electricity supply chain.

The committee is expected to scrutinise whether inadequate investment in the network, operational challenges and other weaknesses contributed to the rise in losses.

The MPs’ concerns also point to broader questions about whether the transition from a privately operated distribution network to a government-owned entity has been adequately planned and resourced.

Acting leadership raises concern

The committee also raised concerns about UEDCL’s governance after it emerged that several senior management positions are being occupied in an acting capacity.

Of the 13 management positions, six, including that of managing director, are currently occupied by acting officials.

MPs also questioned why the chairperson of the UEDCL board is serving in an acting capacity.

Masindi Municipality MP Rogers Byamukama said prolonged acting appointments could weaken accountability and make it difficult for Parliament and other stakeholders to assess individual performance.

He argued that substantive appointments would provide clearer responsibility and enable the utility to be held accountable for its performance.

The committee demanded that the Ministry of Energy provide a clear plan and timetable for regularising the appointments.

Minister Okaasai acknowledged the concerns and committed to having a fully constituted UEDCL board by the middle of September.

He said the board would then be expected to fill most of the acting positions with substantive appointments.

The leadership concerns come at a critical time for UEDCL, which is dealing with the operational demands of managing the country’s electricity distribution network after taking over from Umeme.

Vending system under scrutiny

MPs also scrutinised UEDCL’s electricity vending system, which officials said became operational on December 4, 2024, after receiving the required STS certification.

The system was supplied by Spanish technology company Indra.

However, MPs raised concerns over recurring system breakdowns, particularly towards the end of the month.

They warned that interruptions in electricity vending could inconvenience consumers while also exposing the distributor to revenue losses.

The committee ordered UEDCL to provide documents detailing the procurement process, technical specifications, certification, supplier arrangements and cost of the vending system.

The MPs said the information would help them establish whether the system was procured and deployed in line with the required standards and whether its recurring failures are being adequately addressed.

The committee’s inquiry comes as UEDCL seeks to consolidate its role as the country’s electricity distributor following the end of Umeme’s concession.

For the MPs, the immediate challenge is not only ensuring that the network remains operational but also determining whether UEDCL has the financial resources, technical capacity and institutional leadership required to improve service delivery and reduce distribution losses.

The committee’s scrutiny is likely to intensify as it examines the circumstances surrounding the transition, including investment decisions, financing, governance and the performance of the electricity vending system.