Uganda Electricity Distribution Company Limited (UEDCL), which has managed the country’s electricity distribution assets for 53 days since Umeme’s exit, has secured a USD 25 million (UGX 91 billion) loan from Absa Bank.
The USD 25 million loan is part of a total USD 74 million (UGX 270 billion) package intended to support the refurbishment of the country’s dilapidated electricity infrastructure and the expansion of the distribution network.
“About USD 25 million is from Absa and the [remaining] USD 49 million is internally generated funds,” UEDCL Managing Director Paul Mwesigwa told the CEO East Africa Magazine in a phone interview.
UEDCL in a statement yesterday noted that the funding is meant for the installation of modern, technologically advanced equipment to build a robust, smart, safe, and efficient electricity distribution system.
“Our goal is to ensure a reliable and sufficient power supply that meets the growing needs of our customers,” the statement reads in part.
Averagely, UEDCL is expected to meet an industry target of 300,000 new connections annually.
FINCA's Robinah Siima: Redefining CFO Leadership with Heart, Hustle, and StrategyThe investment is part of a broader strategy to inject USD 350 million (UGX 1.2 trillion) into the grid over the next five years.
In mid-March, Government through the Ministry of Finance acquired about $ 50 million (UGX 183 billion) from Absa Bank as capital investment into the Uganda Electricity Distribution Company Limited (UEDCL) to fully take up power distribution operations from Umeme from April 1, 2025.
An Auditor General’s report published at the beginning of 2025 revealed signs of financial distress at UEDCL indicating that the company’s debt ratio was registered at 70.4%, an indication that more than half of the company’s assets were financed by debt, particularly on-lent loans.
However, it is envisaged that the company’s financials will rebound after taking over the electricity distribution worth a trillion of shillings.