LAST MILE CONNECTION: Umeme Unveils UGX310 Billion Investment Plan for Increase Power Supply, Efficiency and Stability While Powering Uganda.

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Umeme’s Selestino Babungi (in red shirt) with one of Umeme’s Board Directors at the new and bigger Lira Integration Substation in readiness for the upcoming 600 MW Karuma Hydro Power Station. As part of the UGX310 billion, Umeme has allocated significant resources to evacuate and distribute power from the in-construction Karuma and 16.5 MW Siti II Hydroelectric Power stations.

As part of its Vision 2040, the Government of Uganda has through its Electricity Connections Policy 2018-2027 committed to increase its populations access to power from the current 28% to 60% by 2027 and 80% by 2040.

To meet the above targets, all players in the power sector have been asked to come together and connect at least 300,000 new customers annually until the end of 2040 if they are to meet the needs of both the underserved population visa vie the growing annual demand- rated to be at 9.1%.

For this to be achieced there is need to maximumly harness Uganda’s hydroelectric power potential, estimated to be at about 4,000 MW, but also tap into other energy sources, especially geothermal (450 MW), solar (1,000 MW), and nuclear (30,000 MW).

As at the end of December 2019, Uganda enjoyed roughly 528.9 MW of surplus power supply- Uganda’s peak system demand was 723.76 MW versus installed generation capacity of 1,252MW. When Karuma Hydropower Dam which is at 98% stage of completion is finally inaugurated, peak excess could as well reach 1,000MW.

With significant generation ability, Uganda now needs an equaly significant investment into the last-mile connection; getting power to where it is needed most- with huge focus placed on households, factories and schools.

As this development soars on, the whole country is keenly looking up to Umeme Limited. Uganda’s largest power distribution company, that controls up to 97% of all distribution while harnessing Uganda’s ambitious universal access to electricity. Its a show of solidarity with the people of Uganda but also demonstration of UMEME’s  ability to power Uganda.

Its no surprise that, Umeme, last week unveiled its ambitious USD83.3 million (UGX 310 billion) capital expenditure plan for 2020, promising to continue investing strategically in support of the government agenda.

Unveiling the investment plans for 2020, Selestino Babungi, Umeme’s Managing Director said that the power company would, including the USD83.3 million, invest altogether up to USD450m (UGX1.7 trillion) between 2019 and 2025 investment agenda, in support of Uganda’ major energy objectives- increasing grid connections, increasing demand, reliability of supply and driving efficiencies. 

“In 2020, Umeme, secured approval from the Electricity Regulatory Authority (ERA) and has gone ahead to allocate USD83.3 million to 6 critical areas of the business, which when completed, will see us reliably connect over 300,000 customers this year alone,” Babungi said.

Adding that, their 6th  strategic areas will shift to: “addressing energy losses and improve operational efficiency (USD 26.89 million); addressing load demand growth (USD22.72 million); power supply reliability (USD18.89 million); power generation evacuation and supply (USD10.79 million); network systems automation (USD1.93 million) and network protection and security (USD2.06 million).”

Babungi said that in light of government’s bold energy agenda Umeme had increased its investment by 7.2% this year, much closer to the 9.1% growth in demand. Umeme last year invested UGX289 billion and UGX230 billion in 2018. Altogether, Umeme has to date invested over $650 million since it started running the energy distribution concession in 2005, adding 1,210,000 customers. The number of customers have now crossed the 1,500,000 mark, up from the 290,000 the company inherited. Energy losses have also been more than halved from 39.8% in March 2005 to 16.4% as of 2019 at the end of 2019.

 Accoirding Babungi, in 2019 alone Umeme connected 180,000 new customers, out of whom, 178,152 were financed by the Government and development partners under the Electricity Connections Policy.

“With the new capital investments we expect to boost our new customer connections to about 250,000- 300,000 per year,” he said, adding: “We are also investing in leveraging technology and business process improvements to reduce power losses and continue delivering more reliable power affordably,” he said.

“Every money saved in energy losses, our customers benefit directly by way of reduced cost of electricity,” Babungi said.

Detailed investment plan: Central, Nothern and Eastern Uganda to benefit more

  1. USD26.27 million (UGX98 billion) will be invested in converting the remaining 150,000 customers to prepaid metering to address losses as well as improve operational efficiency in customer service;
  2. USD 9.23 million (UGX34.7 billion) will be sunk into evacuating power from the 16.5 MW Siti II Hydroelectric Power Station in Bukwo District, Eastern Uganda;
  3. USD5.99 million (UGX22.5 billion) will be used to construct feeder powerlines to the new Tangshan Mbale Industrial Park. This shall also include a new switching station to ensure effective power supply to the industries in the region;
  4. USD3.4 million (UGX12.7 billion) allocated to evacuating power from the new UETCL substation in Mukono to the Mukono Industrial Area as well as the almost complete National Water & Sewerage Corporation (NWSC) new water plant in Katosi, Mukono District;
  5. USD2.37 million will be spent on evacuation of electricity from the new UETCL Substation in Namanve to enhance power supply quality to the Kampala, Industrial Business Park (KIBP), Namanve;
  6. USD1.82 million (UGX6.8 billion) has been allocated to constructing a switching station at Matugga on the northern outskirts of Kampala City to enable network reconfiguration and network operational efficiency around the Liao Shen Industrial Park, Kapeeka and the surrounding Bombo area;
  7. USD1.66 million (UGX6.2 billion) will be spent on replacing the Bombo substation;
  8. USD1.93 million (UGX7.2 billion) has been allocated to operational and network management systems to ease the provision of the services to its customers;
  9. For Northern Uganda, USD1.56 million (UGX5.8 billion) is being allocated to an evacuation line from the new Karuma Hydro Power Dam, to address demand growth in and around Gulu district.
  10. Another USD1.32 million (UGX4.9 billion) will be spent on reconfiguring the Gulu substation to supplement and improve the old substation infrastructure and address the overloading of the existing power transformers.
  11. In Kampala, Umeme is replacing the obsolete power transformers and switchgear at the Ntinda substation with new 33kV gear to address the quality of supply in the Ntinda area at a cost of USD2.1 million (UGX7.8 billion).
  12. USD1.7 million (UGX6.3 billion) will also be injected into a new substation in Nakawa, Kampala to address the growing power demand from housing developments and industrial areas in the Nakawa and Bugolobi areas;
  13. In Entebbe, to meet the growing needs of the real estate sector as well as the ongoing Entebbe Airport expansion, a new substation is being built at Nakasamba SS at a cost of USD1.38 million (UGX5.1 billion);
  14. USD1.81 million (USD6.8 billion) to be injected into network refurbishment in Njeru Municipality, Jinja district;
  15. USD1.8 million (UGX6.7 billion) to be allocated to injecting new transformers in the network across the country.  

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