Uganda’s electricity distributor, Umeme Limited has secured a USD70m (UGX258 billion) funding to support its planned investments in the electricity distribution network.
The International Finance Corporation (IFC) was the lead-arranger in the syndicate including Stanbic Bank Uganda Limited, Standard Chartered Bank and the Dutch Development Bank (FMO).
According to an earlier notice by IFC on their website, IFC said they would contribute a senior loan for up to USD30 million while USD40 million would be mobilized from other lenders.
In a media statement, Mr. Selestino Babungi, the Umeme Managing Director, said he was pleased with the conclusion of the fundraising process, as “the funds shall be invested in the distribution network to; expand the system, refurbish worn out components of the network, drive efficiencies and increased electricity connectivity.”
According to the statement, Mr Babungi, emphasised the “continued need to invest key priority areas to; unlock demand in light of increased generation capacity as the 600MW Karuma HPP is about to be commissioned” as well as improving “the quality and reliability of supply in high growth areas, doubling electricity connections to 3.2 million customers by 2025, reduction of energy losses to 13% by 2025, rollout pre-paid metering to the remaining 230,000 post-paid single phase customers, deployment of technology and improving general customer experience, while ensuring safety of staff, contractors and the general public.”
“Investments in the distribution system positively impacts our service provision to consumers and the economy in general. Since 2013, Umeme has invested over UGX1.7 trillion (US$ 460 million) in the distribution network, resulting into: growth in customers numbers to 1.4 million from 0.6 million customers, reduction in energy losses to 16.6% from 24.3%, rollout of pre-paid metering to over 1 million customers, improved supply reliability, improved customer experience and efficiencies through use of technology, and a 7% annual growth in electricity sales,” he said.
Irene Mwoyogwona: Beyond the Numbers – How Pride Bank's Award-Winning CFO Combines Profitability and Social ImpactMr. Patrick Bitature, the Chairman of the Umeme Board, said: “This funding will allow Umeme to continue investing in the distribution network to enable the Company support the Government in achieving its short and medium term goals for the electricity supply industry. Umeme has proved that the private sector can be an effective and efficient vehicle to raise and deploy capital that compliments government fiscal resources in provision of social services to the citizens. The company has invested over US$ 600 million since the start of the concession.”
He said the company is in discussions with the Government to extend the electricity distribution concession beyond 2025. Once the concession extension is concluded, he added, the company would be able raise more capital to evacuate and uptake the new generation capacity and increase electricity grid connections.
About Umeme Limited
Umeme is the largest electricity distribution company in Uganda with a total of 1.4m customers. The Company is mandated to operate, maintain, upgrade and expand the distribution network, retail electricity to its customers and improve efficiency within the electricity distribution system. Umeme is a public company listed on the Uganda Securities Exchange and Nairobi Securities Exchange, and regulated by the Electricity Regulatory Authority. Uganda’s National Social Security Fund is the largest investor in Umeme with 23.2% shareholding.
