POWERING INDUSTRIES AND JOBS: Inside Umeme’s USD15.2 million investments in Mbale Umeme’s investments to increase power supply to Mbale, by threefold from 20MW to over 61MW. The USD15.2 million investment, is part of the USD83.3 million investment by the utility company this year.

Umeme Limited, Uganda’s largest power distribution company, has invested USD15.2 million (UGX55.7 billion) into two major power supply quality and reliability projects in the Mbale Umeme district.

The two projects are: the USD9.23 million (UGX34 billion) Siti 2 Project and the USD5.99 (UGX22 billion) Tangshan Mbale Industrial Park Project. When complete, the two projects will ramp up Mbale’s electricity supply by more than three-fold, from the current 20 MW to 61 MW.   

According to Umeme, these two ahead-of-the-demand-curve investments are in line with power company’s 2019-2025 investment plan in which up to USD450m (Shs1.7 trillion) has been lined up to power government’s National Development Plan III whose theme is: “Sustainable industrialization for inclusive growth, employment and sustainable wealth creation”.

Core to this agenda is the Electricity Connections Policy (2018-2027), which targets to increase access to electricity from the current 28 per cent to 60 per cent by 2027 and subsequently 80 per cent by 2040. Early this year, Umeme announced that it will spend up to USD83.3 million (UGX 310 billion)- a 7.2 per cent increment from the UGX289 billion it spent in 2019 to increase grid connections and improve power reliability nationwide.

Increased stable and reliable power for industrialisation and jobs creation

Selestino Babungi, the Umeme Managing Director, told the media on a recent tour of the Mbale projects that the Siti 2 Project includes a 125-kilometre 33kV single circuit double-pole line from the 16.5 MW Siti 2 Hydro Power Project (HPP) on River Siti in Bukwo District. The power will be relayed and integrated into Umeme’s Mbale substation, itself being upgraded and expanded with a new switching station and plant house. Here it will further be stabilized and distributed to industrial clients and commercial clients. The Siti 2 Project is expected to be completed by the end of 31st August 2020.    

The Tangshan Mbale Industrial Park Project on the other hand, consists of a 75km power line, evacuating up to 25 MW from the Tororo UETCL substation to Mbale’s Sino-Uganda Mbale Industrial Park. At the industrial park, Umeme is construction a new switching station where the power will be received and stabilized for distribution to industrial consumers within the park, via a 10 km distribution line, also being constructed by Umeme. This project that started on 7th May 2020 is scheduled for completion by the end of December 2020.

 “The Mbale projects are one of our major investments for 2020 in support of government’s efforts to attract industries and jobs in the eastern region,” Babungi told the media.

 “Having been granted city status, we expect demand in Mbale City and the surrounding areas to grow considerably fast. Current demand is about 20 MW but the industrial park alone is expected to consume 220 MW of power at full capacity. In addition to the industrial park, there is a cement factory in the pipeline in Mbale,” he said.

The industrial park which is expected to consume the bulk of this new supply will at peak, host about 60-80 factories. Currently, eight factories have been built in the park, although four are active, using up to 3 MW of power and employing 1,500 Ugandans. 

“Industrial parks are the future of industrialization in Uganda because they guarantee a lower cost of production per unit. The Mbale Industrial park particularly because of its proximity to the Kenyan border and subsequently the Mombasa Port, is strategic for both import substitution and export-based factories,” Babungi said during the tour.  

Babungi said the investments will plug the medium term industrial demand ahead of additional capacity to the industrial park that is expected to come from a UETCL transmission sub-station planned for 2021.  

Powering Uganda

Cumulatively, Umeme has to date invested $656 million into Uganda’s power distribution network, increasing the number of customers by 1,210,000 from the 290,000 it inherited in 2005 to now over 1,500,000 customers. The investments have also reduced power losses from 38% as of 2005 to 16.4% as of 2019.     

In 2019 alone, Umeme connected 180,000 new customers, 178,152 of whom financed by the Government of Uganda and development partners under the Electricity Connections Policy.