Uganda’s electricity sector is at a turning point, as Umeme Limited’s 20-year concession draws to a close. Umeme was the first private distribution operator in anglophone Africa. For nearly two decades, the listed company was the dominant distributor of electricity to the country’s 2.3 million clients. However, Uganda decided in 2022 not to renew the licence on expiry, citing high power tariffs and low electricity access rates.
Umeme’s departure and the transfer of distribution assets back to the state-owned Uganda Electricity Distribution Company (UEDCL) has sparked controversy. It centres on a US$235 million compensation claim by Umeme. The final settlement could shape power tariffs, the sector’s financial sustainability and investment needs in the country. Peter Twesigye, who researches power market reform, regulation and utility performance in Africa, examines the big questions.
