The current Status of Uganda’s Electricity Sector

Uganda’s Electricity Sector is now run under a liberalised set up, following its liberalisation in 1997 and the enactment of the Electricity Act, 1999. Liberalisation and enactment of the Electricity Act 1999, mandated the unbundling of UEB, which was a monopoly, managing generation, transmission, distribution, sale, import and exportation of Uganda’s electricity.  Legally, Uganda’s electricity sector is regulated under the Electricity Act 1999, Cap 145, the Energy Policy, the National Environment Act Cap 153 and the Statutory Instruments and Guidelines issued by Electricity Regulatory Authority (ERA).

The structure of Uganda’s Electricity Sector

Uganda’s electricity sector is in three segments. The Uganda Electricity Generation Company Limited (UEGCL), manages the electricity generation, Uganda Electricity Transmission Company Limited (UETCL), manages electricity transmission and Uganda Electricity Distribution Company Limited (UEDCL) manages electricity distribution. All the three companies are licenced and regulated by ERA.

The Electricity Regulatory Authority

The Electricity Act 1999, mandated the creation of the Electricity Regulatory Authority (ERA), to regulate Uganda’s electricity sector. ERA was established as a body corporate, with capability to sue or be sued. It consists of five members, appointed by the Minister responsible for electricity, with the approval of cabinet. ERA also has a secretariat that comprises of technical staff who operationalise the decisions made by the five members of ERA. ERA became operational in 2000.

Functions of ERA

ERA is mandated by the Electricity Act, 1999, to issue electricity generation, transmission, distribution, sale and import Licenses, sets License conditions and ensures compliance to License conditions by Licensees.  ERA is also mandated to establish a tariff structure, approve rates of charges among other functions. ERA is duty bound to conduct its functions, in an open, objective, fair, reasonable, non-discriminatory, transparent manner and also promote fair competition. ERA ensures that utilities earn a reasonable rate of return on their investments necessary to provide a quality service at affordable prices to the electricity consumer.

Current Electricity generation

The Electricity Regulatory Authority being a regulator of Uganda’s electricity sector, presided over growth in the available generation capacity from 359.5 MW since the liberalization of the electricity sector, to 601.1 MW and this is predominantly from renewable sources. This eliminated load-shedding and doubled the access to electricity from 7% to 15%.

In order to ensure sustainable electricity supply, ERA supported the diversification of Uganda’s generation mix and to-date, Uganda enjoys a mix of energy sources as follows:-

  1. Hydro - 459 MW
  2. Thermal - 100 MW
  3. Cogeneration - 41 MW

The formally owned UEB’s generation assets, in particular the power plant assets at Owen Falls dam that were privatised in 2003, are now operated by Eskom Uganda Limited, under a 20-year concession.  Several Independent Power Producers (IPPs), such as Bujagali Energy Limited, Hydromax, Jacobsen among others are all generating electricity consumed by Ugandans. The electricity generation capacity now stands at 601.1 MW. To date, Uganda’s electricity sector has grown from three generation sources to over ten and still growing. Total installed generation capacity has grown from 60 MW in 1954 to over 682 MW.

Electricity Transmission

Electricity transmission is under the Uganda Electricity Transmission Company Limited, which is the single operator of the transmission system and deals directly with Independent Power Producers, executing Power Purchase Agreements. All independent power generators do generate electricity, feed into the national grid and distributed to electricity consumers.

Electricity Distribution

Due to a conducive regulatory environment created by ERA, a remarkable improvement in the distribution of electricity in Uganda has been realized. As a result, a reduction in energy losses from 30% since liberalization to 19.1% has also been registered.  The connection rate has also increased and the legally grid connected customer base increased from 405,459, to 713,756,indicating a growth of 43%.

As a way of eliminating monopolism in the electricity sector and improve on efficiency in the generation and distribution of electricity, ERA issued licenses to new electricity distribution companies. The number of electricity distribution companies now stands at 8. The distribution companies are; Umeme Limited, West Nile Rural Electrification Company (WENRECo), Uganda Electricity Distribution Company Limited (UEDCL), Bundibugyo Electricity Cooperative Society (BECS); Kyegegwa Rural Energy Cooperative Society (KRECS); Pader-Abim Community Multi-Purpose Electric Cooperative Society (PACMECS); Kilembe Investments Limited (KIL); and Kalangala Infrastructure Services Limited (KIS). The number increased from one distributor (UEB) to 8 distributors. The companies are operating in various regions of the country, which has increased access to electricity. 

Electricity Consumer protection

ERA, as a regulator of Uganda’s electricity sector invested in consumer protection.  A fully fledged Consumer and Public Affairs unit was established in 2012 and it handles electricity consumer complaints that have not been resolved by distribution companies.

To further promote consumer protection, a contact center was established reached on 0200 506000, during working hours (8:00 am to 5:00pm, Monday to Friday).  A WhatsApp platform on (0776188188) is also in place. Consumer education was also intensified, Information, education and communication materials were developed and disseminated to consumers in different parts of the country to help electricity consumers know their rights and obligations.

The standardized consumer complaints handling guidelines were developed and approved by the Electricity Regulatory Authority, geared towards consumer protection. Different channels of communication including social media are available to consumers such as Facebook, WhatsApp, Twitter, Fax, Email, and the Website to lodge their complaints in case distributors fail to resolve them.

Uganda’s Electricity Sector licensing process

The Electricity Act, 1999, stipulates that Licenses can only be issued for a period not exceeding a maximum period of 40 years, except Licenses for hydro power generation of a capacity not exceeding 10 MW.

For generation Licenses, the Electricity Act, 1999, provides for reversion to the Government of any generation rights, property and installations, upon expiry of a License for hydropower plants, with a generation capacity exceeding 10MW, with no compensation payable. This however, does not apply to power plants in which the Government owns 50% of more of the plant.

The License Application process

Licenses may be granted following an invitation of tenders by ERA or pursuant to an application by a person who intends to develop a project. After submission of an application, ERA processes the application within a maximum of 180 days of receipt of the application. The process involves the advertisement of notices in the Gazette and a prominent newspaper, to solicit objections. ERA may refuse to grant a License.

The Electricity Act, 1999, gives a right to a Licence applicant aggrieved by the refusal of a License to appeal to the Electricity Dispute Tribunal, established under the Electricity Act, 1999.

With the attraction of private investment in Uganda’s electricity sector, the sector has tremendously grown and continues to grow on a day by day basis.