Government commences power sector reforms to ensure affordable cost

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The Ministry of Energy and Mineral Development has commenced the implementation of the Power Sector Reforms, targeting to enhance sector performance and provide affordable power to the people of Uganda.

In a statement by the ministry on Friday,Β December 9, 2022, Dr. Ruth Nankabirwa, the Energy Minister, confirmed the implementation process, stating that a transition phase has been launched, which will see the formation of a company named Uganda National Electricity Company Limited (UNECL) as a state-run entity with majority shareholding under a public-private partnership (PPP) arrangement as a possible option.

This follows a Cabinet directive on October 3, 2022,Β not to review the Concession and Privatization Agreement for Eskom Uganda Limited and UMEME Limited after their concessions come to their natural end.

Nankabirwa revealed that the ministry had directed the Electricity Regulatory Authority (ERA), Uganda Electricity Distribution Company Limited (UEDCL), and Uganda Electricity Generation Company Limited (UEGCL) to make appropriate arrangements for the transition.

“To this effect, I call upon the parties to the concession agreements to ensure a smooth transition of all the relevant responsibilities and asset handover in close coordination with this ministry,” Nankabirwa said.

According to her,Β  the ministry would spearhead the transition process and engage all concerned parties, including the stakeholders, to ensure that the government of Uganda’s decision to end the concession naturally is executed reasonably.

She added that the respective committees are tasked with the planning and management of the end of the concessions to ensure a seamless handover of the operation of the assets.

Irene Bateebe, the Permanent Secretary in the Ministry, added that the government is committed to availing itself of the necessary financing to ensure it fulfils its obligations under the related agreements.

“UEDCL and UEGCL will be supported to enable them to manage the transition period and operation of the concessions, as happened with the 50 MW Namanve Thermal Power Plant that reverted to UEGCL in 2021,” Bateebe elaborated.

She added that, with the support of the Auditor General, the company would undertake a valuation of its investments to determine any outstanding obligations by the government.

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