UMEME over achieves revenue and investment targets set by government of Uganda
Electricity distribution company UMEME has announced that it has met and exceeded the government of Uganda set targets for revenue collection and investment to boost electricity distribution services in Uganda.
Charles Chapman, Managing Director UMEME Uganda
In a detailed performance scoresheet report UMEME released on Monday as part of the Electricity Regulatory Authority’s (ERA) quarterly tariff review process, UMEME Managing Director, Charles Chapman said they have achieved great success in their five years of operation in Uganda.
UMEME took over electricity distribution on behalf of Uganda Electricity Distribution Company (UEDCL) in 2005, one of the three companies made from the Uganda Electricity Board. UMEME, a South Africa firm got a concession from the government of Uganda to undertake power distribution on behalf of UEDCL.
The report says that UMEME had by the end of 2009 invested over US$80million (about 170 billion Uganda shillings) in the electricity distribution network in Uganda, which is over and above the US$65million target the government of Uganda set for March 2010.
According to a statement from UMEME, the investments include a comprehensive systems improvement programme and a pilot prepaid metering project in the process of being introduced to over 10,000 customers in Kitintale Area covering Mbuya, Bugolobi, Mutungo, Luzira, Bina and Kinawataka, in Kampala East, at a cost of US$3.4million.
Highlights of UMEME performance over past five years
- Invested US$ 80M over 5years, above government target of US$ 65M
- Has started prepaid electricity metering, pilot with 10,000 customers
- To invest US$ 32M in 2011 to improve services
- Connected 172,000 new customers, government target was 60,000
- 97% of electricity bills being paid, compared to 75% in 2005
- Implemented 100 rural electrification schemes worth over US$6.5million
- Reduced new connection time to 7 days from 35 days in 2005
- Reduced power losses from 38% to 30%
- Have applied to ERA for a distribution tariff of Ushs190.76 for 2011
“To-date, we have invested more than US$100million, and we plan to invest at least US$32million more in 2011. These investments are into assets owned by the government of Uganda through the Uganda Electricity Distribution Company (UEDCL),” Chapman says.
“These investments have already began to pay off, and Umeme is now connecting more people than ever before. From the start of the concession, Umeme was given a target of connecting 60,000 new customers in the first five years. Today, we have exceeded that target by connecting over 172,000 new customers,” he adds.
UMEME improves revenue collection
The company also says it has scored highly on revenue collection, with 95% of all bills being paid by the end of 2009, as opposed to 75% in 2005 when Umeme took over from the Uganda Electricity Board. The target set by the government of Uganda for Umeme by end-2009 was 92% of bill collections.
The Scorecard report explains that the rapid growth in the demand for electricity is being met by an expensive reliance on diesel generation, which is aided by government subsidies to maintain stable end-user tariffs.
Electric poles for power distribution
The Umeme scorecard also indicates a decrease in the time taken to process new connection requests, from 35 days to an average of seven (7) days from the time a customer makes payment for a new connection.
“We recognise the government of Uganda’s efforts to increase hydro and renewable generation capacity in the short and long term. This will relieve and remove the reliance on the more expensive thermal generation,” Chapman says.
Umeme declared that as part of the safety programmes, over 120,000 rotten poles have been replaced countrywide, sub-stations have been fenced and, in some areas, traditional overhead conductors are being replaced by aerial bundle conductors, which are much safer. more on page 2 below