The Independent Uganda: You get the Truth we Pay the Price
The company faces numerous challenges such as limited funding,long distances of distribution networks and high energy losses
Kampala, Uganda | JULIUS BUSINGE | State-owned Uganda Electricity Distribution Company Limited has recorded a 10.5% surge in revenue to Shs88.5bn for the year ended June 2023.
The company executives revealed during the Annual General Meeting held in Kampala on Feb.28 that the increase in revenue was attributed to the increase in operational efficiency and increased customer connections during the period under review.
However, the period also saw total expenses climb by 21%, from Shs60.9 billion in June 2022 to Shs73.7 billion in June 2023. This rise was largely due to an increase in electricity purchase costs, heightened fuel prices, escalated repair and maintenance expenses for the aging network, and additional administrative costs stemming from court cases related to wayleave payments.
Despite these financial pressures, UEDCL managed to post a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBTIDA) of Shs 14.8 billion for the period ended June 2023, although this represented a 22.6% decrease from Shs19.2 billion in the previous year.
“UEDCL is committed to maintaining financial stability through rigorous revenue management and cost-control measures, focusing on operational efficiency, customer service excellence, and business sustainability,” said UEDCL’s Managing Director, Paul Mwesigwa.
Mwesigwa said UEDCL carried on with its cardinal responsibilities, including monitoring the UMEME electricity distribution concession to ensure compliance with the lease and assignment agreement (LAA), power distribution in nine service territories and running its creosote plant for the supply of treated wooden poles to the national electricity grid during the period under review.
He said the company also undertook the construction of several rural electrification schemes on behalf of the Ministry of Energy and Mineral Development.
The company, however, faces numerous challenges such as limited funding for necessary investments in the distribution network, long distances of distribution networks at 33kv due to limited 132kv transmission coverage, and the management of energy losses which stood at 21% in 2023, exceeding the Electricity Regulatory Authority’s target of 20.1%.
Vandalism and the non-payment of lease fees by Umeme Ltd for the use of UEDCL assets have further strained the company’s operations, leading to a net deficit after tax of Shs2.18 billion for the period.
Energy loss and Umeme takeover
Meanwhile, UEDCL’s energy loss management has improved over time, going from 25% in 2022 to 21% as of June 30, 2023.
However, this is still more than the Electricity Regulatory Authority’s approved target of 20.1%.
Since 2018, several hydroelectric power plants have come online and these plants are a part of the UEDCL network which directly produces overloads during evacuation, resulting in significant technical losses.
Mwesigwa said this is one issue the company is ready to tackle as it prepares to take over Umeme’s work come early next year.
He said the company will require a total of US$ 70 million per year to invest in the network up from the current approxUS$ 40 million that Umeme incurs.
He said UEDCL technical staff are already in the field establishing areas that require repair and maintenance once Umeme exits.
The Minister of Energy and Mineral Development, Ruth Nankabirwa who chaired the AGM said the government is committed to supporting UEDCL as it prepares to take over Umeme territory to ensure the sustainability of power supply – a key factor for running the economy.
