Uganda Electricity Distribution Company Limited (UEDCL) has secured a five-year financing facility worth USD 50 million (about UGX 190 billion) from Absa Bank Uganda to fund urgent upgrades to the national electricity distribution network, even as the company’s board undertakes a comprehensive investigation into the performance and conduct of senior management.
The facility, signed on December 15 at the UEDCL Tower in Nakasero, is earmarked for network reinforcements, construction of new electricity substations, rollout of smart-grid initiatives, reduction of technical losses and integration of renewable energy generation.
According to UEDCL, the investments are expected to improve electricity reliability, unlock suppressed demand by the close of 2026 and support Uganda’s broader industrialisation agenda.
The timing of the financing is significant. Earlier this month, the Ministry of Energy and Mineral Development instructed the UEDCL Board to conduct a detailed inquiry into issues raised in a recent audit and performance assessment by the Electricity Regulatory Authority (ERA).
Against this backdrop, the Absa facility signals continued institutional and market confidence in UEDCL’s role as Uganda’s sole electricity distributor.
Board chairperson Lydia Ochieng-Obbo said the financing is timely given the network’s “thirst for funding” after years of underinvestment, adding that the deal sets a benchmark for government agencies to responsibly access private-sector capital.
She noted that the agreement reflects support not only for UEDCL, but for government’s wider infrastructure agenda.
Managing Director Paul Mwesigwa said the funding will directly support network upgrades and reliability improvements that underpin government’s universal electricity access and industrial growth strategies.
He explained that the Electricity Regulatory Authority approved the loan’s inclusion in the tariff framework to help make the distribution segment more self-sustaining, and highlighted that the facility carries an interest rate of about 8 percent VAT-inclusive, significantly lower than prevailing market rates of around 28 percent.
Kilembe Mines, Woodcross Resources top list of mining companies defaulting on mineral rent at UGX 3.75 billionAbsa Bank Uganda managing director David Wandera said the facility reflects the lender’s commitment to mobilising long-term capital for infrastructure that supports productivity and inclusive growth.
He described reliable power distribution as fundamental to Uganda’s industrial competitiveness, noting that the partnership aligns with Vision 2040 and National Development Plan IV.
The financing comes less than nine months after UEDCL formally took over electricity distribution on April 1, 2025, following the expiry of Umeme’s 20-year concession.
ERA’s assessment, which triggered the ongoing board inquiry, points to the scale of the challenge. UEDCL inherited an aging network characterised by tens of thousands of deteriorating wooden poles, overstretched transformers and substations operating beyond safe capacity.
These constraints, combined with rising demand and years of deferred investment, have weighed on service reliability during the early months of state-run distribution.
Prime Minister Robinah Nabbanja recently intervened to halt the immediate dismissal of several senior managers, calling instead for a measured, evidence-based process that would avoid destabilising a power sector already undergoing a sensitive transition.
In a statement issued on December 5, the Energy Ministry clarified that no staff member had been dismissed and stressed that the board-led investigation is a standard internal governance process rather than a punitive exercise.
Energy Minister Ruth Nankabirwa also dismissed speculation that the review could lead to the introduction of a private distributor, insisting that UEDCL’s mandate remains intact and that any accountability measures would follow established legal and regulatory frameworks.
