ERA Grants UEDCL Licenses to Lead Uganda’s Electricity Distribution in Landmark Reform

Dr. Sarah Wasagali Kanaabi, Chairperson of the Electricity Regulatory Authority (ERA),has delivered a comprehensive speech detailing the Authority’s decision to grant licenses to the Uganda Electricity Distribution Company Limited (UEDCL). Her address highlighted ERA’s commitment to transparency, inclusivity, and aligning Uganda’s power sub-sector with the government’s strategic reforms.

Dr. Kanaabi began her remarks by outlining UEDCL’s applications submitted under Regulation 18 (2) of the Electricity (Application for Permit, License, and Tariff Review) Regulations, 2007. The applications sought:

A Licence for the Distribution of Electricity: This would allow UEDCL to manage and distribute electricity across Uganda.

A Licence for the Sale and Supply of Electricity: Enabling UEDCL to take over electricity supply responsibilities from the outgoing concessionaire.
Approval of Tariff Performance Parameters, which include:
Distribution loss factors to minimize energy wastage.
Distribution operations and maintenance cost standards.
Days lag in operational cash flow cycles.

A target for uncollected debt to address non-payment issues.
Connection targets to expand electricity access to underserved areas.
Minimum standards for the reliability and quality of electricity supply.
Dr. Kanaabi emphasized that these applications were submitted in preparation for the expiration of Umeme Limited’s concession and licenses, marking a new era of electricity distribution under state management.

The Chairperson contextualized ERA’s decision within the broader framework of Uganda’s energy reforms. She pointed out that Cabinet had resolved not to renew the expiring concession agreements with private electricity distributors, paving the way for UEDCL to assume responsibility.

“This decision is part of the Second-Generation Reforms aimed at ensuring sustainable, efficient, and affordable electricity supply for all Ugandans,” Dr. Kanaabi stated.

Dr. Kanaabi detailed the robust processes ERA undertook to evaluate UEDCL’s applications. These included consultations with key government ministries, including:

Ministry of Finance, Planning, and Economic Development,
Ministry of Justice and Constitutional Affairs.
ERA also held engagements with Umeme Limited and other licensed companies in the generation, transmission, and distribution sectors to ensure all stakeholders’ views were considered.

To further promote transparency, ERA convened a public hearing on October 22, 2024, at the Imperial Royale Hotel in Kampala. The hybrid event, with virtual participation via Zoom, YouTube, and the X Platform, provided a platform for electricity consumers and the general public to present their perspectives, raise objections, and propose solutions.

Dr. Kanaabi praised the public for their active participation, noting that the hearing underscored the importance of stakeholder involvement in shaping Uganda’s electricity policies.

In accordance with its mandate under Section 10 of the Electricity Act, ERA made its final decision to grant UEDCL the requested licenses and approve the proposed tariff performance parameters. Dr. Kanaabi highlighted the anticipated benefits of this decision, including:

Enhanced Service Delivery: UEDCL’s benchmarks aim to improve efficiency and reliability.
Cost-Effective Tariffs: Optimized operations are expected to lower electricity costs for consumers.
Expanded Electricity Access: UEDCL’s connection targets will contribute to Uganda’s electrification goals.
She reaffirmed ERA’s commitment to monitoring UEDCL’s compliance with these parameters to ensure the intended outcomes are achieved.

Dr. Kanaabi emphasized the significance of this transition. “This marks the beginning of a new chapter in Uganda’s electricity distribution landscape. UEDCL’s leadership in this sector will drive us closer to achieving universal access to reliable and affordable electricity,” she said.

She called on all stakeholders, including the government, private sector, and the public, to support this transition and contribute to the realization of Uganda’s energy aspirations.

The decision has been met with optimism, as many stakeholders view it as an opportunity to address the longstanding challenges of reliability, affordability, and accessibility in Uganda’s electricity sector.

As UEDCL gears up to take over the distribution and supply responsibilities, ERA remains steadfast in its role as the regulator, ensuring the company meets its obligations to the Ugandan people.

Dr. Kanaabi’s address underscores ERA’s dedication to fostering a transparent, inclusive, and forward-looking energy sector that aligns with Uganda’s development goals. The transition to UEDCL’s leadership represents a pivotal step in Uganda’s journey towards energy sustainability and economic growth.