I will begin my presentation with a quote from Pietro Metastasio; “Every noble acquisition is attended with its risks; he who fears to encounter the one must not expect to obtain the other”
Operations of UEDCL are Governed by the Electricity Act, of 1999 (Chapter 145 Laws of Uganda). It has an asset ownership License issued on March 1, 2005, from the Electricity Regulatory Authority (ERA) to own facilities for the distribution network up to 33kV.
Following the Government’s need to attract private capital in the power distribution subsector, the distribution network was a concession to Umeme by the GOU, where UEDCL entered into a Lease and Assignment Agreement (LAA) with Umeme on May 17th, 2004, for investing, operating and maintaining the distribution network for a period of 20-years. This concession ended on 28 February 2025.
UEDCL continued to operate a continuously expanding and mainly in the rural electricity distribution network surrounding the Umeme-operated network.
Over the past two decades, UEDCL has taken over 5 concessions, including Ferdisult Engineering Limited (2017), Bundibugyo Energy Cooperative Society (BECS, 2021), Pader Abim Community Multi-Purpose Energy Society (PACMECS, 2023), Kyegegwa Rural Energy Cooperative Society Limited (KRECS, 2024) and Kilembe Investments Limited (2024). Thus, Umeme becomes the sixth concession being taken over by UEDCL. And we want to thank you for the deliberate guidance both as our shareholders I.e. the Minister of Energy & Mineral Development and the Minister of Finance Planning & Economic Development and the GOU for the tremendous support towards all the takeovers.
The above decisions were punctuated by UEDCL’s demonstrable; corporate governance, efficiency, financial sustainability, digitalized operational ICT systems, (ECRIV, CMMS, FFMS, HRIS, SCADA), and ability to transform and turn around rural service territories deemed not economically viable then, but now these areas are fairly commercially viable.
All the above takeovers undertaken are informed by a deliberate philosophy that aligns with a clear regulatory environment. UEDCL Management under the guidance of the Board follows the following principles in concession takeovers; regulatory notice, /due diligence on the network to ascertain integrity, submission of the tariff, restricted recruitment that is fair & competitive, and investment thereafter for business performance actions.
Resultantly, business in all service territories taken over has grown and services improved, making them sustainable. For example, when we took over Ferdisult in 2017, the electricity energy loss target was 28% and today, we stand at 18.1%.
UEDCL Business philosophy has five notions and we follow them to dot. These include connecting the customer, making power available, managing energy losses, collecting cash, and promoting safety. It is against these that UEDCL has been able to present itself as the trustable government of Uganda’s power utility that is going to turn around the power distribution space.
With specific consideration on Umeme, GoU took the decision not to renew the Umeme concession in 2022. This followed preparation on side of policy; three committees were formed and that is, the Inter-ministerial committee Chaired by the Honourable Shareholders and the Attorney General, the Joint technical committee chaired by the Permanent Secretary MEMD, and Retransfer cordinationation committee chaired by UEDCL MD and his counterpart at Umeme.
The retransfer coordination committee has been guided by the JTC-approved roadmap which coincides with the Lease and assignment agreement; the associated risk matrix has been neutralised and today I can say, with the exception post LAA activities which we have now embarked on to handle. I want to thank GoU, the Shareholders, and the financial partners for providing the financial resources required to close this transaction for the Buyout amount and the CAPEX investment funds
required to run the distribution business.
The Management of UEDCL is also grateful for the support of the Authority in preparation for this smooth retransfer of assets. We received the license for the sale and distribution of electricity in Uganda on 31 December 2024. The tariff requirements have been received by UEDCL as issued by the Regulator plus the seed capital including the financial sustainability model that has enabled to improvement of the creditworthiness of the sector.
UEDCL has already commenced with all the critical procurements (network and non-networks) requirements needed to ensure business continuity after Umeme. In this regard, I thank the Minister for providing guidance but mostly for providing us with the initial connection material that we shall start connecting all pending customers in the Umeme territory.
In regards to talent management, Hon. Minister, UEDCL Board, and Management treat this matter with utmost care. Thus, we are grateful that Shareholders approved a staff structure of 2,712 in December. We immediately on January 6 2025 embarked on recruitments and as we speak today, Hon Minister, at least 99.6% of the employees in respect of the above structure have been appointed, the 0.4% of about 11 employees will be done by close of business today. We did a water-tight recruitment exercise, Hon. Minister, and we followed our HR manual to dot.
On ICTs, all systems (in Umeme and UEDCL) shall be maintained. These are on our ledger and we shall continue deploying them until the time when we will merge them without interrupting service delivery. Buying electricity units and other services will remain uninterrupted through channels (MTN & Airtel), banks, and other collection platforms. In addition to the above, all electricity units purchased by customers before Umeme’s exit shall remain valid even after Umeme’s exit.
Hon. Minister and members, all offices previously run by Umeme Limited will remain open even after their exit. Out of the 51 current service centers, 26 belong to UEDCL and they will organically revert to us as the landlord. For the rented offices, the respective landlords have been engaged to ensure continuity of service post-Umeme.
All cars, motorcycles, trucks, vans, SUVs, and other mobile equipment will all revert to UEDCL. Hon. Ministers, the respective log books for all these are at UEDCL Tower and we shall ensure all are reconciled before the last day.
UEDCL is grateful to the Umeme Management, Staff, and Board for the support accorded during and before this transition. We have enjoyed a cordial relationship and we look forward to more collaborations.
Hon. Minister, I want to recognize the Staff and Management of UEDCL for the journey thus far. We have spent sleepless nights to ensure that this transition is seamless; I will forever be indebted to them. In the same vein, but special spirit, I want to thank the UEDCL Board for the resilient efforts and strategic guidance that has seen this asset return home after 20 years. Hon. Ministers, this transition’s success is a testament of great leadership by a government company at all tiers. Under the current Board’s strategic guidance, UEDCL has expanded tremendously and I think this is a key parameter speaking to how much they have put in to grow this business.
On another special note, allow me to welcome Umeme staff to UEDCL. The best word to say is well come home. Among the more than 2,200 Umeme employees UEDCL has taken on, some moved to Umeme in 2005, and today, we welcome you back. We shall do everything possible to have you settle in.
UEDCL is committed to improving reliability in the country by deploying all the investment resources with technology to spur social-economic transformation.
In light of the above, I thank all Ugandans for the overwhelming support and we commit to fulfilling our ERA parameters as embedded in the license issued by the Authority on 31 December 2024.