In recent months, UMEME’s impending departure from Uganda’s electricity distribution scene has roused special interest in many Ugandans. UMEME has managed Uganda’s electricity distribution for nearly two decades, a task inherited from the government-run Uganda Electricity Board (UEB) back in 2005. Now, however, as the government has decided not to renew UMEME’s concession, many are left wondering: What comes next? Will electricity distribution revert to full government control, or is there another path forward?
UMEME’s role as Uganda’s primary electricity distributor began with promise in 2005. Following years of frequent blackouts and system inefficiencies under the Uganda Electricity Board (UEB), UMEME’s concession aimed to bring a fresh, private-sector approach. For the first time, Uganda’s power distribution was handled by a private entity, with a 20-year mandate to reduce system losses, improve reliability, expand access, and provide a more customer-focused service.
But despite UMEME’s infrastructure improvements and service expansions, high tariffs and lingering reliability issues led to frustration among consumers. Over the years, these concerns steadily grew, and by 2023, the government of Uganda chose to end UMEME’s concession by 2025, signaling a potential shift back to a government-run model.
The causes behind UMEME’s departure reflect a blend of policy shifts, public opinion, and national ambitions. Uganda’s government has expressed a desire to bring power distribution back under public control, aiming for improvements in affordability, reliability, and access. UMEME’s tenure has had its share of controversies, with criticisms over high tariffs, inconsistent supply, and concerns about rural electrification
For many, however, UMEME’s departure stirs both hope and skepticism. On one hand, Ugandans may gain from potentially lower tariffs and greater government oversight. On the other, UMEME’s exit poses questions: Will a government-led system be able to improve reliability, manage costs, and continue the infrastructural progress made?
Let’s take a look at life at a different time.
Before UMEME, the Uganda Electricity Board (UEB) was the heart of Uganda’s power distribution for nearly six decades. Established in 1948, UEB was tasked with overseeing electricity generation, transmission, and distribution, making it a state monopoly and the sole custodian of Uganda’s electricity.
However, UEB faced chronic challenges that hindered its ability to provide consistent, reliable service. Limited funding, outdated infrastructure, and rising demand strained its capacity. Power outages were frequent and maintenance delays were common. The lack of advanced metering and monitoring systems also meant that power theft and technical losses were high. Billing issues plagued the system, leading to inefficiencies and customer frustrations.
As demand grew, the UEB struggled to expand services beyond the urban areas, and rural electrification remained a distant goal. By the late 1990s, UEB’s service quality had begun to deteriorate, which meant that UEB’s operations were largely inefficient, driving up costs that were ultimately passed on to consumers. By the time UEB was unbundled and privatized, electricity access was below 10% nationwide. These challenges highlighted the need for reform and set the stage for privatization.
The unbundling process led to the creation of three separate entities responsible for generation, transmission, and distribution as part of a broader strategy to improve the power sector. UMEME took on the distribution role, entering a sector in dire need of repair and modernization with a 20-year concession from the Ugandan government.
UMEME’s entry was seen as a bold move toward privatization, with promises of better service, investment in infrastructure, and an overall modernization of Uganda’s power distribution system.
UMEME quickly implemented reforms aimed at reducing technical and commercial losses. The company invested in new substations, transformers, and digital metering systems to improve efficiency and reduce the widespread power theft that plagued UEB. These efforts paid off: power losses dropped significantly, service reliability improved, and urban areas saw fewer outages.
However, the improvements came at a cost. To fund infrastructure investments and meet shareholder expectations, UMEME introduced higher tariffs, which many Ugandans felt were unaffordable. The company also faced criticism for prioritizing profitability over accessibility, particularly in rural areas where extending the grid was not as lucrative. Despite these criticisms, UMEME’s tenure brought Uganda closer to modern power standards, with a streamlined billing system and reduced power interruptions in many parts of the country…which is how we are where we are today.
To take a comparative look, comparing UMEME and UEB, it is not hard to note that both parties have faced their fair share of challenges, however, it is also not hard to notice and acknowledge the change UMEME brought to the distribution of electricity in Uganda.
A direct comparison between UEB and UMEME highlights both progress and ongoing challenges:
- Reliability: Under UEB, outages were frequent, and maintenance was slow. UMEME’s investments helped reduce these issues, though outages still occur.
- Infrastructure: UEB operated with aging equipment and minimal upgrades, while UMEME brought in new technology, including digital metering and better substations.
- Cost: UEB’s services were affordable but inconsistent, while UMEME’s higher tariffs funded improvements, albeit at a financial strain for many customers.
- Customer Service: UEB’s manual billing led to inefficiencies, while UMEME introduced digital systems and improved customer support.
- Access: UEB’s reach was limited to urban centers, whereas UMEME extended access but still faced challenges with affordability in rural areas.
UMEME’s departure presents Uganda with a unique opportunity to rethink its approach to power distribution. The government has indicated plans to take over distribution, aiming to address issues like affordability, rural electrification, and service quality. The transition, however, won’t be without challenges. The government will need to invest in maintaining and expanding the infrastructure UMEME leaves behind, and questions remain about how it will handle tariffs and operational efficiency.
Reflecting on UMEME’s contributions and shortcomings, the future of Uganda’s power sector depends on the ability to balance modernization with public accessibility. The ideal model would incorporate the best of both worlds—retaining the efficiency of a privatized system while ensuring electricity remains affordable and widely accessible.
However, while UMEME’s exit brings hope for a more affordable and accessible power sector, it also raises concerns for the job market. With its advanced systems and customer-focused approach, UMEME employed a significant workforce, from technical teams to customer service representatives across Uganda. The transition may put these roles in jeopardy as the government or a new entity reshapes the distribution landscape. Retaining experienced personnel and integrating UMEME’s skilled workforce could prove valuable for maintaining service standards and preserving the expertise UMEME cultivated during its tenure
As Uganda navigates this transition, it’s clear that balancing efficiency with public accessibility will be key to building a resilient power sector, hopefully, we’ll see it come to fruition.
