Persistent Power Outages: Should the bells for Umeme return be rung? 

By Paul Tentena and Zabali Kuruthum

Shena Twebaze is a Cakes Baker in Kakoba, Mbarara City. She bakes cakes for birthday parties, weddings, children parties among others.

Her business depends entirely on electricity. When power goes off while her cakes are in the oven, they usually go bad or become half-baked hence registering losses.

“Power outages delay production; they affect the quality of the baked products and prevents me from completing customer orders on time.

“This means that customers who place their orders wait longer, get irritated or have to go to other bakers. The delay disappoints them so much, it affects the reputation of my business and income. Remember cakes are always booked for a certain purpose which cannot wait for long,” says Twebaze.

Another person affected with persistent power outages is Arthur Ahimbisibwe, who operates a Saloon in Mulago, Kampala City.

He says when power goes off, because his equipment like hairdryers, clippers and shaving machines use electricity, he cannot serve his customers on time while others leave to look for saloons with electricity.

For Catherine Ankunda, a Juice Maker in Kikumi Kikumi found in Makerere Ward, Kampala City her juice production business is highly affected when power goes.

“I cannot prepare juice quickly because my blender cannot work without electricity and also the fridge is off for cooling. This makes my customers to go and buy from other sellers with electricity.

“Without electricity, also my fruits and sometimes the juice I have prepared also goes bad because the fridge is off hence making losses,” says Ankunda.

Michael Asiimwe the Manager of People’s Supermarket Mpererwe on Gayaza Road says many of their products especially the perishables go bad when electricity goes off.

“We lose the fresh meats, milk, yogurt and end up having huge losses,” notes Asiimwe.

For Sadiq Mayengo, who runs a tailoring business, his electric sewing machines cannot operate without electricity. “When power is off, it puts us at loggerheads with our customers. We cannot work on the Uniforms, curtains, suits, Gomesi’s carpets and many other things creating mistrust with our customers,” adds Mayengo.

“When power is off, it means am out of business. I cannot fry the Chips and Chicken to sell to my customers. When Umeme was still around, power was always on though expensive. I wish they can return,” says Farooq Kyazze.

Can Umeme return? Has UEDCL failed to deliver?

According to Selestino Babungi, the former Managing Director of Umeme Ltd, who were running a 25-year power distribution concession since May 2004, Umeme’s concession closed by law and the electricity act was amended in 2022 to allow government to run power distribution through Uganda Electricity Distribution Company Limited (UEDCL).

“By law, Power distribution went back to government,” said Babungi.

“Government would have to declare that UEDCL has failed and re-tender distribution under the Electricity Regulatory Authority (ERA) licensing. Under the Electricity Act 2022, ERA can license multiple distributors, not just one concession as it was,” he added.

Though Umeme as a company still exists, has expertise and is looking for concessions elsewhere including in Sierra Leone, its return can face a number of hurdles as its concession was directly ended after a presidential directive because of complaints about high tariffs and the 20% guaranteed return.

Also, Umeme’s case at the London Court of International Arbitration (LCIA) could make the company’s return an uphill task as it claims as per the Privatization Agreement that it still demands $266.4 million plus interest plus $145 million of unrecovered investment costs from 2008 to 2021 totaling to $400 million.

It alleges in the London Court that the agreements say the Retransfer Transition Period was supposed to end when the buyout was paid in full with a 10% interest rising to 20% after 90 days.

What the Government says

Opolot Okasai, Uganda’s State Minister for Energy in the Ministry of Energy and Mineral Development says UEDCL inherited a very old power distribution network where they are currently making major network upgrades and repairs.

He says they are replacing old transformers, repairing power substations and high voltage power lines hence the on and off power outages.

He also noted vandalism of power lines and theft of transformer oil as another challenge because oil theft makes the transformers they have replaced to blow out.

“But even after the upgrades, we do not expect the power outages to be completely ruled out because power demand has increased tremendously. There is need for more power to be generated,” said Okasai.