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Private Investors Get Green Light To Electricity Transmission From Government

Private Investors Get Green Light To Electricity Transmission From Government

The business of electricity transmission has been opened up to private investment by the government. This is provided for in the Electricity (Amendment) Act 2022 which President Museveni ascended to in May 15 this year.

The Uganda Electricity Board (UEB) used to be a monopoly managing generation, transmission, distribution, sale, import, and export of Uganda’s electricity. However, in 2001 it got split into three segments.

These segments were;

  1. The Uganda Electricity Generation Company Limited (UEGCL), manages only the production of electricity.
  2. The Uganda Electricity Distribution Company Limited (UEDCL), presides over the distribution of power in the country.
  3. The Uganda Electricity Transmission Company Limited (UETCL) manages how electricity is moved from the source to its destination.

These segments still exist today but all operate independently with the generation and distribution segments being liberalized. However, the government also owns its generation and distribution companies.

When it comes to the transmission segment, this one is wholly owned by the government of Uganda through UETCL.

The company is solely responsible for purchasing electricity in bulk and selling it to distribution companies in Uganda.

The amendment of the Electricity Act 2022 removed the single buyer system where one body bought all power generated.

The Electricity Regulatory Authority (ERA) CEO Eng Ziria Tibalwa Waako reaffirmed this on Tuesday. This means that ERA is required to put some regulations in place that operationalize that amendment.

“So, we are in the process of putting in place the regulations. We are already at the draft stage, and we are consulting various stakeholders to have their input in this regulation to ensure that once it is finalized, it meets the expectation of all players,” Eng Waako said.

She also said the regulation should be fair to all consumers who are using the same voltage.

Transmission infrastructure growth has stunted generation and distribution which have attracted substantial investment, especially from China.

This came after the government partially privatized those two sectors, following the unbundling of Uganda Electricity Board (UEB) in 2000. The power transmission sector in Uganda requires fresh investment of billions of dollars.

By June 2023, Karuma hydropower plant will be completed and commissioned and will be generating 600 megawatts. With this, Uganda’s total general ratio capacity will be brought to 2,000 megawatts.

If the sector isn’t opened to private investment, a risk of power plants being completed without transmission lines in place will arise.

This is probably the reason government considered opening electricity transmission to private investment.

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