POWER CRISIS! UEDCL Power Losses Rise as Investment Crisis Deepens…Is Management Competent Enough or an Early Red Flag?
UEDCL ED Rwakakooko
Parliament’s Committee on Natural Resources has questioned whether the Uganda Electricity Distribution Company Limited (UEDCL) was adequately prepared to take over the country’s electricity distribution network from Umeme.
The committee, chaired by Kazo County MP Dan Kimosho, cited low investment, rising distribution losses, and weaknesses in the utility’s governance during a meeting with UEDCL management, including Acting Managing Director Joselynne Rwakakooko, and Minister of State for Energy Sidronius Okaasai Opolot.
MPs questioned why UEDCL did not make sufficient investments before Umeme’s concession ended, despite the government having known for years that the transition was coming.
Figures presented to the committee showed that Umeme invested approximately 72 million US dollars in 2021, 34 million dollars in 2022, 23 million dollars in 2023, and close to 10 million dollars in 2024, bringing its investment during the final five years of the concession to about 132 million dollars, approximately 490 billion shillings.
By comparison, UEDCL was reported to have invested about 1.5 million US dollars, approximately five billion shillings, since taking over the network, including new connections.
The disparity prompted MPs to question whether UEDCL had been sufficiently prepared to absorb a distribution network that had benefited from substantially higher levels of investment under Umeme.
The committee chair questioned how UEDCL could be expected to deliver efficiency comparable to Umeme when it inherited a system that had received significantly higher levels of annual investment.
UEDCL’s Chief Finance Officer, Jacqueline Kiwanuka, told the committee that government had planned to provide resources to the utility ahead of the transition, but the funds did not materialise as initially expected.
She said UEDCL subsequently sought permission to borrow and eventually obtained financing after the transition.
The committee, however, questioned the circumstances surrounding funds that could have been used to prepare UEDCL for the takeover.
MPs sought explanations from the Ministry of Energy and the regulator over decisions concerning funds accumulated through the electricity tariff and whether UEDCL had been prevented from using them for investment before the takeover.
The committee said documents indicated that some funds had been available shortly before the takeover and that instructions had allegedly been issued for the money to be fixed in a bank account and earn interest rather than being immediately deployed into network infrastructure.
The committee said it would investigate the matter further and summon former UEDCL Managing Director Paul Mwesigwa and the regulator to provide explanations.
The concerns over UEDCL’s preparedness come against a backdrop of rising electricity distribution losses. UEDCL officials told the committee that energy losses had increased to about 18.5 percent, compared with approximately 15 percent at the time of the handover from Umeme.
Acting Managing Director Rwakakooko told MPs that, as a rule of thumb, each percentage point of annualised energy losses represents about seven million US dollars, equivalent to about 25 billion shillings.
The legislators also raised concern about UEDCL’s leadership and governance. It emerged that most of the top managers at the power distributor are in acting capacities.
Of the 13 management positions, six, including that of Managing Director, are currently occupied in an acting capacity.
The committee also raised concern that the chairperson of the UEDCL board was serving in an acting capacity.
Masindi Municipality MP Rogers Byamukama said prolonged acting appointments could weaken accountability and make it difficult to track the utility’s performance.
The committee demanded that the Ministry of Energy provide a clear plan and timetable for regularising the appointments.
Minister of State for Energy Okaasai acknowledged the concern and committed to having a fully constituted UEDCL board by the middle of September. He said the board would subsequently be expected to fill most of the acting positions with substantive appointments.
The committee also scrutinized UEDCL’s electricity vending system, which officials said went live on December 4, 2024, after receiving STS certification before deployment.
The system was supplied by Spanish company Indra. MPs raised concerns over recurring breakdowns around the end of the month, saying system failures could expose the utility to financial losses and inconvenience customers.
They ordered UEDCL officials to provide documentation on the procurement, specifications, certification, supplier, and cost of the system.
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