UECDL: No electricity without paying

KAMPALA, UGANDA | THE INDEPENDENT | Uganda Electricity Distribution Company Limited (UEDCL) now controls the country’s electricity distribution network with the end of the 20-year Umeme concession.

UECDL’s management under Paul Mwesigwa not only takes charge of the 170,000 transformer zones and 34000 kilometers of lines.

It also inherits a close to three thousand-person workforce together with other assets spread all the district where Umeme has been operating. Question like will UECDL fit into Umeme’s feet and manage the network more efficiently are bound.

For starters, Uganda Electricity Distribution Company Limited (UEDCL) has been in the electricity sector since 2001. It was established after 1999 following the split of Uganda Electricity (UEB).

Though it owned the concession run by Umeme, it appears to have been overshadowed to the extent many Ugandans knew little or nothing about the government-owned power distributor.

At least the fact that Ugandan may have it difficult to pronounce UECDL was highlighted by the Energy and Mineral Development Minister, Ruth Nankabirwa while officiating at Umeme hand over on Monday.

The bigger question however is that will Paul Mwesigwa, his top management and board fill the Umeme gap, add to is already existing half or full plate to ensure that efficiently Ugandan are supplied with electrons?

Paul Mwesigwa answered some of this and other questions while receiving the big switch. However, most of what he said seem to have been overshadowed by speeches of the day.

Mwesigwa previously worked as the head of Internal Audit and risk management at Umeme. So he can take credit for some of the successes at Umeme before he crossed to lead UEDCL.

He told Uganda Radio Network that he expected to meet some challenges with in the new transition but quickly noted that as the concession owner, UEDCL was constantly monitoring Umeme to check the performance of the network.

UEDCL has been running some of the off grid stations located in different parts of the country. The off grids were not part of the concession to Umeme because they were deemed non profitable and therefore neither Umeme nor other investors were interested in investing in them.

Mwesigwa said they have managed to turn around the off grids and now they are self-sustainable. “We need to thank our board for that and the effort that UECDL has done” he said

One of these is Bundibugyo Energy Cooperative Society (BECS) which had been under concession for ten years. It reverted to UEDCL in 2021.

Mwesigwa boasts that Bunbdibugyo and other areas which are hard to reach and were not commercially viable now don’t get any subsidies from the government.

UEDCL future success also depends on how the sector is regulated by the Electricity regulator Authority (ERA). Mwesigwa noted that over the past two decades, rural areas that were not connected to the main grid were turned around with support of the rural electrification.

He said some of the former off-grid stations are now on the main grid. UEDCL had in total eight (8) service territories. It is also in charge of the pole treatment plant. It aloes took over five private concessions. The takeover of private concession was outs of a cabinet decision in 2022.

President Museveni directed that licenses of the private distribution companies must not be renewed. Museveni tasked UECDL to take over operatorship of the private power distribution. “The decision by the government for us to take over distribution was based on our presentation and demonstration in terms of governance, efficiency, financial sustainability, digital operation environment of our systems” Mwesigwa stated.

Can UECDL leverage on these and others to ensure stability of the network and reach more customers than the 2.5 million connections that it has just received from Umeme?

On the financial aspect, UECDL has just received a-$74 million loan financing to enable it operate. It is also expected that a-$700 million revenue business that Umeme says it has handed over will continue to grow beyond an average of 10%.

The revenue from the business should enable it to operate with profits to enable to meet the costs and repay the loans.

Mwesigwa said they used their systems to run the recruitment process in a record time f 75 days before the expiry of the Umeme concession. “We deployed two methods. The online interview models and physical models. That is super. But what have we based on? Our digital environment that seeks to communicate to the customer that we deal with,” he said.

However, an official at Umeme who asked for anonymity however told URN that UECDL may have a bit of a challenge in managing the human resources aspect. It appears that this challenge was foreseen.

Umeme is under contractual obligation to supports Mwesigwa and team to address this and other challenges during the six months of transition. Besides that, according the Irene Batebe, the permanent secretary at the Ministry of Energy, a team of experts from the World Bank is expected to beef up the Umeme advisors during the transition.

Leveraging on digital environment Paul Mwesigwa said they have majorly been operating the company’s up country operations based on digitized system.

“Where we operate, we are situated in Kampala and our first office from is 120 kilometers from Kampala. But we are in position to communicate an inter relate with the network through all the digital mechanism”

“All the take overs that we have handled and they underlie the philosophy of the business where we believe in connecting the customer and making that power available through the controls in places and systems that we are managing” he added.

Mwesigwa expects to low the energy losses up 14% for the rural areas where it has been operating. Lowering the energy losses will be one of the challenges he has at hand.

Umeme faced the same challenge too. It handed over the concession when it had lowered the energy losses to about 16%. Whether he manages this task will depend on the systems in place but above all, more investments from the government as well as regulations from the regulator.

There has been talk of the need to amend the PPDA law to allow UECDL run or carry out procurement without going through some of the rigors in the law as it is.

Converting electrons into money .

He acknowledges the fact that the distributor under the value chain of electricity must convert the electricity generated and transmitted into the network into money.

“Our collection is 100% no shortcuts. If we connect you on our network, you have to pay” he warned. UECDL has 99% of its customers operating on prepaid, up to 500 KVA connections for medium voltage manufacturers on pre-paid including the government’s installations.

“Therefore we are ready to hit the road. And we are sure that the transformers and the generators that the funds should be flowing. The investors on the generation side should be assured. That they will recover their investments accordingly”

“I can assure the population that there were some pending connection from Umeme, our warehouses are full. We shall start deploying logistics across the country. Within a period of ten days all connections should be up and running” he said.

He promises to clear all the pending connections within three months.

UECDL expects to connect 300,000 connections before end of 2025. “We have done mechanism and models. The good things is that more than half of the stock is in our warehouse. And we shall achieve that target” he promised.

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URN