SP027/2018

POWER Transforming Uganda CONTENTS

PUBLISHER: The Independent Publications Limited. YEAR: 2018 MANAGING DIRECTOR: Andrew M. Mwenda GENERAL MANAGER: Charles Kankya SALES & MARKETING: Peter Kusiima EDITOR: Haggai Matsiko WRITERS: Julius Businge, Agnes Nantaba, Agather Atuhaire, Flavia Nassaka PHOTOGRAPHY: Silver Ofwono, Jimmy Siya CREATIVE & GRAPHIC DESIGN: Tim Katuramu, Moses Mwesigwa

Independent Publications Ltd. P.O. Box 3304 Kampala Uganda Email: [email protected]

All rights reserved. No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means) without the prior written permission of the copyright holders. Application for the copyright holder's written permission to reproduce any part of this publication should be addressed to the publisher CONTENTS

Umeme has stabilised power supply 1 Umeme is a top grade performer 3 How Umeme has transformed Electricity 4 distribution in East Africa Our ambition is to power Uganda’s 7 prosperity Umeme is an exemplary company in East 12 Africa How Umeme freed up capital for investment 36 into power generation How Umeme has built a competitive work 60 force UMA commends Umeme for power 68 distribution Umeme growing small businesses 96 Umeme powers 2,004 schools 108 Prepaid meters saved Mulago from darkness 110 Umeme facilitates medical research in Uganda 120 NWSC: Umeme critical to water production 124 and supply Umeme is biggest distributor of power to 128 rural communities Creating meaningful impact through CSR 133 investments Umeme plans to invest US$1 billion to meet 140 new power demands Simon D’Ujanga, Minister of State for Energy Umeme has stabilised power supply

ew Ugandans may understand “Umeme has improved the the contribution of Umeme to collection rate against billed customers the country’s power sector and Umeme’s and this has further improved with pre- economy as much as Simon significant paid metering,” D’Ujanga notes. “Their D’Ujanga, the Minister of State investment into significant investment in the distribution Ffor Energy. network and maintenance has greatly The electrical engineer currently the distribution improved reliability of supply and other supervises Umeme’s regulator, network and efficiencies.” the Uganda Electricity Regulatory maintenance has The biggest problem in the Authority. Before he served as Deputy electricity sector, D’Ujanga says, had Managing Director of Uganda Electricity greatly improved for a long time been energy losses, Board (UEB), the defunct government- reliability of which were also the biggest cause of owned electrical utility company, from high end user tariffs. 1994 until 1997 and as its Managing supply These losses tend to be technical Director from 1997 until 1998. (power that gets lost in the process of Reforms saw UEB unbundled transmission) and commercial (power into three entities; the Uganda theft). Electricity Generation Company While government retained Umeme inherited losses as high as Limited (UEGCL), the Uganda transmission under UETCL, it handed 38%. 13 years into its concession, it Electricity Transmission Company the concessions for electricity has reduced losses by more than half Limited (UETCL) and the Uganda generation and distribution to to 16.5%. Electricity Distribution Company private companies. Umeme took the Limited (UEDCL). The three entities distribution concession. D’Ujanga attributes all this are in charge of electricity generation, D’Ujanga has confidence in tremendous progress to the transmission, and distribution, Umeme’s efficiency, which he says has investment that Umeme has made into respectively. reduced losses and made power supply the distribution system. reliable.

Umeme Power: Transforming Uganda 1 Eng. Ziria Tibalwa Waako, Chief Executive Officer, Electricity Regulatory Authority

2 Umeme Power: Transforming Uganda Umeme is a top grade performer

he Electricity Regulatory Authority Tibalwa says Umeme has even surpassed (ERA) was established by the 1999 its targets on containing power losses. Electricity Act to license and regulate Umeme found the losses at 35.2% and has operations in the electricity sector. reduced them to 16.5% and is targeting Its mandate includes setting 14.9% at the end of this year. Toperating standards and appropriate end user The only challenge the regulator still has tariffs. This makes ERA Umeme’s immediate with Umeme, is the high cost of financing, supervisor. 80OVERALL PERFORMANCE% which in effect increases the tariff. ERA Chief Executive Officer Eng. Ziria Also the reliability of supply is not yet Tibalwa Waako is happy with Umeme’s work. at the level it should be and the regulator She rates Umeme’s perfomance at 80% and encourages the entity to channel more says that the power distributor has contributed efforts in that direction. significantly to the electricity sector. “Although they have improved the For instance, she says, the entity has reliability and quality of supply,” she says, increased the number of customers connected “They can make it even better. There is still to the grid by more than 200% from 280,000 room for improvement.” to 1.2 million. As of 2018, the growth rate in Tibalwa also says Umeme should help connections stood at 138%. government in accelerating growth and Indeed Umeme's 2017 annual report demand stimulation. indicates that connections increased “Over all,” she says, “Umeme has done monumentally to 8,431. tremendously well and if I were to rate its performance, I would give it 80%.”

17% 200% Drop in power Increase in 138% losses from number of people Growth rate in 35.2% on the grid connections

Umeme Power: Transforming Uganda 3 How Umeme has transformed Electricity distribution in East Africa

ince its inception in 2005, Umeme has delivered on majority shareholder owning 23% of the company. This its promise of turning Uganda’s electricity distribution has demonstrated confidence not only in Umeme and the system into one of the best in the region. sector, but the country as a safe investment destination. Uganda’s electricity sector reforms were premised From inception, we have continued to practice world- on attracting the private sector to anchor the class corporate governance standards. We believe in Soverarching need of achieving financial and commercial sustainability of the institution while serving society. To viability of the Electricity Supply Industry. that end, we continue to focus on environmental, social, I am pleased to highlight the positive impact of Umeme to and governance matters at the Board level. customers, the general community, and the entire country. Looking ahead, the challenge and opportunity lies in Over the period, the company has invested over US$ 600 the upcoming electricity generation capacity that will million in the electricity distribution system. increase the installed capacity to over 1,700MW after As a result, this investment has doubled the size of the the commissioning of Isimba and Karuma Hydro Power distribution network, reduced energy losses to 16.5% from Plants (HPPs). Our ambition is to ensure the power is 38%, improved revenue collections, and grown customer delivered safely, reliably and efficiently to the consumers connections to 1.3 million. for economic and social transformation of Uganda. The effective generation capacity has increased from 300 Our strategy is to focus on the industrial hubs and areas MW in 2005 to 930MW as of 2018. The electricity supply to of high economic activity alongside the rural electrification our esteemed customers is more reliable than it was before drive. We will prioritise increasing grid connections for the the sector reforms. businesses and government. The National Development Plan projects electricity access rate of 40% by 2025, Umeme is one of the biggest FDI attractors in Uganda. compared to the current estimated 23%. Our investment The company has mobilised debt financing from among plans are aligned to the priorities of the sector. others, the International Finance Corporation (IFC), Standard Chartered Bank, and Stanbic Bank to a tune of On behalf of the Board, I extend our sincere US$ 265 million. appreciation to the government, stakeholders, business partners, management and staff for the support over the Equally, through listing on the Uganda Securities period to transform the electricity industry in Uganda. Exchange (USE), the ownership of the company has been We pledge our support and dedication to further the broadened to over 5,700 shareholders. NSSF Uganda is the development of the sector.

4 Umeme Power: Transforming Uganda Patrick Bitature, Chairman Board of Directors, Umeme

Umeme Power: Transforming Uganda 5 Selestino Babungi, Managing Director, Umeme

6 Umeme Power: Transforming Uganda Our ambition is to power Uganda’s prosperity

meme has positively anchored Uganda’s electricity Innovating for Service supply industry that is projected for further growth During the last 13 years, Umeme has innovated and on commissioning of new generation plants. implemented technologies that have delivered a remarkable The success of Umeme is traced to implementation customer experience. of it strategic plans over the period. This has focused We rolled out SCADA (Supervisory Control And Data Uon investment in the electricity distribution infrastructure to Acquisition) and other auto switches for remote monitoring improve on efficiency, reduce energy losses, expand and re- and control of the distribution network. Network automation enforce the distribution infrastructure, and increase customer has led to higher system uptime and better supply reliability connections. to electricity consumers. Realising that billing and revenue collection processes Investments were cumbersome and inconveniencing to our customers, The company has invested over USD 600m in the distribution we rolled out a pre-payment metering system called Yaka network to ensure safe, efficient and reliable electricity supply. in 2011. So far 950,000 out of 1,200,000 are on the Yaka The impact of the investments is summarised below: system. During the same period, Umeme implemented an integrated payments system that enables customers pay Performance Area 2005 2018 their bills 24/7 through mobile money, Visa and through the Network line length (km) 16,000 34,000 numerous bank platforms. The payments convenience has increased the revenue collections rate from 80% in 2005 to Distribution Transformers 6,000 12,000 an average of 99% over the last 4 years. Distribution transformer capacity (MVA) 550 1,900 For the post-paid customers, we have introduced the Customers on the Grid (‘000) 290 1,200 automated meter reading system, eBill and smsBill to shorten the commercial billing cycle. Distribution energy losses 38.0% 16.5% The Umeme contact centre provides a 24/7 access Electricity Sales (GWh) 1,015 3,000 platform for our customers to report or inquire on our services. In line with modern trends we have incorporated

Umeme Power: Transforming Uganda 7 Our Journey

President Yoweri Museveni meets Umeme's managing director Selestino Babungi, Board Chairman Patrick Bitature, Chief Financial Officer, Florence Nsubuga and board member, Gerald Ssendawula at State House Entebbe

8 Umeme Power: Transforming Uganda digital and social media platforms in Distribution Efficiency These improvements have our communication channels. benefitted the sector and the Efficiency is important in the quest to consumers to an estimated saving of The Umeme App has most of the provide affordable services. To that end, US$ 170m per annum. features for customer self-service. Umeme has improved the electricity These include; balance enquiries, distribution efficiency from 50% to reporting network issues, and checking 85% as of 2018, through reduction of Electricity Demand on network status etc. As a business, energy losses to 16.5% from 38% of we prioritise technology in driving 2005, coupled with increased revenue I am also glad to note that continued efficiencies across our operations. collections to 99% from 80% of 2005. growth in electricity demand now

Umeme Power: Transforming Uganda 9 stands at 600MW from the 180MW of Building Technical Capacity technical capacity of the engineering 2005. Electricity sales have been growing department has drastically improved. Because we prioritise the development at 9% per annum hitting the 3,000 GWh in and skilling of our employees, Umeme The company employs 1,500 direct the last 12 months compared 1,000 GWh continues to lead in the training and employees with an additional 700 of 2005. development of technical and engineering contractor staff. 23% of the staff are With increased customer connections staff. female. and industrial demand this trend is We recruit 20 Graduate Trainees and projected to continue over the coming 100 technicians from universities and period. Financial Performance technical colleges per annum. As a result, the number of electricity The company aspires to remain an The new staff undergo a 3 year technical generation plants have increased from two attractive investment for its shareholders development programme ahead of their in 2005 to 21 as of 2018, with a combined and capital providers. As such, delivering commissioning as engineers or technicians. installed capacity of 930MW. sustainable profitability is an important Due to this deliberate policy, the pillar for the business. Over the first 6

10 Umeme Power: Transforming Uganda months of 2018, the company's profits were Ushs 61 billion. Umeme is also among the top ten tax payers in Uganda The Future with average tax remittances of Ush 75 As an investment driven sector, the upcoming generation billion per annum. capacity requires significant investments in the distribution In 2013, the company mobilized infrastructure. Going forward, therefore, our investment plan US$190 million of long term financing from will be focused on uptake of new capacity, increased access, the International Finance Corporation, and driving efficiencies in the business operations. A total Stanbic Bank and Standard Chartered estimate of US$ 1.2 billion is required to fund distribution Bank, to finance its investment program network investments over the next 10 years. Our ambition to 2018. is to power communities, businesses and industries for a prosperous Uganda.

Kampala City at night

Umeme Power: Transforming Uganda 11 Umeme is an exemplary company in East Africa

ational Social Security Fund (NSSF) should lead to higher earnings for the is the single largest shareholder of company. power distributor, Umeme. It has In addition, according to NSSF, the earned Ush32.1 billion in dividends demand for electricity is growing at over since 2012 when it first invested in 10%, a faster pace than supply, and with the power utility. N more energy projects coming to fruition NSSF first acquired a 15% stake in Umeme in the next few years, the company in 2012 and four years later, increased the is well positioned to take advantage stake to 23%, making it the single biggest of that opportunity. And Umeme has shareholder in the power distributor. Stake in demonstrated competency to do this.

“Umeme is one of the Fund’s best 23% Umeme The Fund primarily would like to performing equity investments, and one Makes NSSF the single invest more in Uganda, so investment in of the best performing listed companies in Umeme Limited provided us with a great East Africa,” says NSSF’s Managing Director, biggest shareholder opportunity to invest at home, notes Richard Byarugaba. Byarugaba. The Fund’s investment into Umeme was also driven by Most importantly, Byarugaba explains, “the investment was the desire to increase access to electricity, which has a direct in line with our statutory mandate to judiciously invest NSSF impact on the country’s socio-economic development. members’ savings, and our Investments Strategy, to enable us “We see the role Umeme Limited plays in enabling pay a competitive return to our members.” access to electricity as very critical in Uganda’s development Byarugaba adds that the investment into Umeme also journey,” Byarugaba adds. “Uganda still has one of the lowest fits well with NSSF’s strategy to diversify their investments electricity consumption per capita levels in the world, with portfolio, a key component of their Corporate Strategy to only an estimated 23/26% of the population having access to grow the Fund to Ush20 trillion by 2025. electricity.” “It also fits well within our plan to deploy capital in growing Owing to this, NSSF sees Umeme’s future as a successful areas like the energy sector,” Byarugaba adds. business because the ever-increasing demand for electricity

12 Umeme Power: Transforming Uganda Richard Byarugaba, Managing Director, NSSF

Umeme Power: Transforming Uganda 13 Umeme MD, Selestino Babungi (R) hands over a cheque of Shs4.5 billion to NSSF MD, Richard Byarugaba (L) as the gross dividend payout in 2015

14 Umeme Power: Transforming Uganda Umeme MD Selestino Babungi briefs a management team on financial results

Umeme MD Selestino Babungi briefs a stakeholders' meeting

Umeme Power: Transforming Uganda 15 UEB staff carrying out repair works before Umeme acquired the distribution concession

By Andrew M. Mwenda Umeme has he debate about Umeme tends to generate more emotion than reason with most commentators’ arguments generating more transformed heat than weight. This article is an attempt to bring reason and weight in explaining Umeme’s Tcontribution to the development of the energy sector Uganda’s in Uganda specifically, and Africa in general. When government decided to unbundle Uganda Electricity Board (UEB) into three separate entities to manage electricity generation, transmission and power sector distribution, it hired an international company called Fieldstone Private Capital Group Limited to help

16 Umeme Power: Transforming Uganda handle the matter. After two years of work, government put out a tender for generation and distribution concessions. Five companies expressed interest and came to Uganda to do a due diligence on the sector. After studying our political and regulatory framework all of them pulled out without submitting a bid. They felt investment in the electricity distribution sector in the country was fraught with risks. What were the issues? Uganda had subsidized the electricity tariff for nearly a decade. For example, UEB had not adjusted the price consumers paid for electricity between 1993 and 2002. By then, the price being charged for electricity had lost any relationship to the actual cost of power due to inflation and foreign exchange depreciation. The electricity market was also characterized by illegal connections and defaults. This state of affairs was the opposite of what was happening in neighbouring Kenya where the electricity tariff was (and still is) subject to constant adjustment every year to both domestic inflation and foreign exchange depreciation. Because of prolonged price stability, Ugandan electricity consumers took it for granted that electricity was cheap and that its price could not change. This social consciousness created a strategic risk: any attempt to change the tariff would stimulate political Umeme technician inside the Namugongo substation resistance from consumers backed by their elected representatives. one cared whether the tariff covered the investor would have to ruthlessly More still, there was little effort by the costs of electricity production, clump down on power thefts by UEB to curb illegal connections or transmission and distribution. raiding homes and small businesses to penalize defaulters. This had created apprehend illegal connections, hire a high commercial losses for the sector. Reducing technical losses required security force to curb thefts of power To compound this, UEB had spent heavy investment in upgrading the lines, transformers and tampering with decades with little or no investment power lines and transformers, meters meters and finally ruthlessly cut off in improving the distribution lines, and even more investment in human many defaulting customers off power transformers and meters. This had resource. Yet this would mean that to force them to pay. This operation led to high technical losses making the a private investor charges this cost would destroy the image of any sector unattractive to investors. UEB through the tariff. Secondly, reducing investor before his customers. was a government parastatal and no nontechnical losses required that

Umeme Power: Transforming Uganda 17 But most critically, these measures had political implications. The public was most likely not going to accept increases in the tariff because a culture of consuming cheap electricity had penetrated the political consciousness of consumers. There was also a problem with the independence of the regulator, because the Electricity Regulatory Authority (ERA) had once increased the tariff, people went onto the streets to demonstrate against this decision and government intervened and suspended it. The Commonwealth Development Corporation (CDC) put these issues in writing, making clear the existence of political and regulatory risks. But they also said if these issues were addressed, they could get interested in bidding. CDC formed a consortium with Eskom. Both are parastatals, the former owned LOSSES by the British government, the latter by the South African government. No 2009 fell from 35% to 30% private investor was willing to risk their capital in such a tense political climate. 2010 to 28% The negotiations between government on one hand and CDC and 2013 to 24% Eskom on the other lasted three years. 2018 to 16.5% in Africa. CDC and Eskom feared Government promised to protect the that if anyone attempted to increase investor from regulatory and political the tariff, especially at a steep rate, it risks and the concession was designed Umeme’s target would cause thefts, defaults and illegal by escalating the penalties government 14.9% to reduce losses connections. So, the concession made would pay in case of a breach. This it clear that the government could not was the first distribution concession increase the tariff for more than 10% in any given year and not more than 20% in any three consecutive years. Thus, Umeme does not support any rapid escalation of the tariff and this is enshrined in the concession agreement. In fact rapid increases in the tariff are a violation of the concession, which should force Umeme to pull out. The question then was: if the tariff was going to remain stable and change only by not more than 20% every three years, who was going to pay for the mismatch between the existing tariff and actual cost of production, transmission and

18 Umeme Power: Transforming Uganda distribution? The answer is government cost of electricity, thus increasing the illegal connections and defaults, making through the subsidy. Contrary to price of subsidies. it difficult for the company to reduce popular belief, government does not To avoid escalating costs, nontechnical losses. The result was pay Umeme any subsidies. It pays them government decided to increase the that government suspended the loss to Uganda Electricity Transmission tariff by 22% in March 2005, then reduction targets to keep Umeme Company Limited (UETCL) on behalf 35% in May 2006 and another 43% in involved. It is only after electricity of the consumer. November 2006. Thus, in less than two supply constraints were eased in 2009 Even after government had agreed years, government increased the tariff that ERA began to set collection and to these demands, Umeme was by 98% contrary to the concession loss reduction targets. In 2009, losses reluctant to take over the distribution agreement. fell from 35% to 30% and in 2010 they network and indeed asked for an fell to 28%. In 2013 the losses had fallen Again, Umeme had all the rights to 18-month concession as a trial run to to 24% and in 2018, Umeme has a terminate the concession. see whether government would honor target to have reduced them to 14.9%. its part of the bargain. Umeme agreed Government would have been Given that technical and non to invest a nonrefundable US$5m in forced to pay full compensation. Indeed technical losses in Kenya are 17% these 18 months. Five months to the Umeme threatened to do exactly that, Tanzania 20%, Rwanda 22% and Burundi end of that period, in March 2005, a factor that triggered negotiations 25%, the targets set for Umeme by power supply declined by 50% due to with government. ERA are going to make Uganda have low water levels in Lake Victoria. This Umeme argued that such a sudden the least losses in the region by 2018. forced government to bring in thermal hike in the tariff was going to increase generators, a factor that escalated the

Umeme Power: Transforming Uganda 19 Private equity sparks revival at Ugandan utility Umeme —FT

s in most of sub-Saharan Africa, there is no shortage of The transaction was supported by a US$40m guarantee foreign investment schemes in Uganda that have failed from the Multilateral Investment Guarantee Agency and or not materialised. The decision of Hilton Hotels to support from the International Development Association, both abandon a project in Kampala because of concerns World Bank bodies. over construction standards is one recent example. The David Grylls, energy partner at Actis, says the company was government’s failure to secure a developer for its oil refinery is A “very encouraged” by such backing. “It all aligned the investors’ another. interest with the country’s,” he says. “We committed to a But Umeme, the country’s main private power distribution US$65m guarantee for a number of years.” Total investment and supply company, has been a rare example of a successful during the fund’s involvement was about US$500m. partnership between private investors and developers. It has “It was a pretty weak situation that we stepped into,” Mr transformed a struggling business into an example of regional Grylls says. There were fewer than 300,000 customers, about best practice. 38% of electricity was being lost and the collection rate (the Crucially, the main foreign investor, Actis — a private equity percentage of customers from whom bills are collected) was firm focused on emerging markets — sold its stake in Umeme only 80%. without problems after more than 11 years’ involvement. It “There was a lack of attention for employees, contractors and provides a valuable lesson for potential investors: success is the public,” Mr Grylls says, pointing to the 15 network-related highly unlikely to be straightforward but, with a willingness to fatalities in 2005. “It was like turning round a supertanker.” adapt when necessary, decent profits are possible while the country benefits. A significant drought in 2006 almost derailed the investment. “Water was at an 80-year low, there was power rationing, Actis took over Umeme after the utility was awarded a 20- rolling brownouts and we had to use temporary generators,” year concession in March 2005, becoming the first significant Mr Grylls says. “There was no way all the costs could be passed private electricity distributor in sub-Saharan Africa.

20 Umeme Power: Transforming Uganda on to the consumers.” But with financial help from IDA and a renegotiation of the concession agreement, Actis stayed on board. Umeme also brought in new managers. The first external financing came in 2009 in the form of debt from the International Finance Corporation, the World Bank’s investment arm. The following year Actis started planning Umeme’s initial public offering. This took place in 2012 with the sale of 40 per cent of the company to institutional and 6,000 retail investors. Actis, which agreed to a two-year lock-in for its remaining stake, viewed the sale as much more than just a way of beginning its exit. “By going public and selling to retail investors we were getting buy-in from our customers,” Mr Grylls says. Umeme was also cross-listed on the Nairobi bourse, and two years later Actis sold off another 45.7%, reducing its stake to 14.3%. It completed its exit last December.

Umeme Power: Transforming Uganda 21 By the time it left, the proportion of who regrets not buying more shares in the the population connected to the grid IPO. had risen from 5 per cent to 16 per cent; “You want as many local entities as energy losses had halved to 19 per cent; possible to be in charge of the economy the number of network-related fatalities because they’re not going to run away at had gone from a peak of 17 in 2008 to the first sign of trouble,” he says. zero in 2015 and 2016; and the collection rate had risen to 98.4 per cent. Investec Asset Management Africa and the IFC are also among the largest Customer numbers, meanwhile, tripled shareholders. to almost 900,000. This is impressive considering the initial target was growth Silha Rasugu, an analyst at Exotix of 65,000 over the first five years, although Partners, an investment company, cautions some analysts say the increase in recent that Umeme’s task to increase supply and years could have been faster. distribution is far from finished. Umeme’s share price listed at 275 As for the secret of doing business Ugandan shillings (US$0.08) and peaked at in Uganda, the advice that Mr Grylls 692 shillings in August 2015. It currently gives suggests it is not very different to trades at around 480 shillings. elsewhere. “Build relations, be consistent, deliver what you say you’re going to do, The largest shareholder is the live up to or exceed your part of the government pension fund, the National bargain,” he says. Indeed, the Actis partner Social Security Fund, which holds 23.2%. has only one disappointment about the Not only does the fund have a reputation investment: “My only regret is there aren’t for being well run, it has the advantage of more of these utilities on the market in being local, according to political analyst sub-Saharan Africa.” and Umeme investor Bernard Tabaire —

22 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 23 Umeme has been the most successful PPP — World Bank

ccording to a 2017 World Bank report, Uganda has an estimated infrastructure deficit of about US$1.4 billion a year and loses nearly US$300 million per a year. This is partly a result of inefficient infrastructure spending, underpricing and the inability to complete projects within cost and on schedule, the report explains. To deal with this problem, the World Bank report says that the government needs to Aleverage private resources to enable it close financing gaps and achieve higher levels of efficiency. Public Private Partnerships (PPPs) can help minimize the risks related to inadequate funding of the government’s infrastructure program, and to longer term aspects of ensuring the efficiency of investments for the economic and socio-economic transformation of Ugandans, reads the World Bank report. As an example of successful PPPs, the report singles out Umeme. “Uganda’s experience with PPPs is primarily in the energy sector,” notes the World Bank. “The Umeme concession has been by far the most successful PPP, helping distribute electricity more efficiently in the areas it services. System losses have been reduced from 38% to less than 20% over a period of 10 years, and revenue sales collection have increased from 65% to 98% since February 2017.” In another World Bank report titled "Making Power Affordable for Africa and Viable for its Utilities", Umeme was ranked as one of the utilities that fully recovered their operational and capital costs.

24 Umeme Power: Transforming Uganda These are the results of the company’s multiple efforts aimed at providing excellent service, which is fundamental to Umeme’s business operations. The company has always aimed at faster response to customer requests, continuous supply of electricity and information around electricity. Over the years, Umeme has continued to implement and improve different initiatives to improve its digital/online presence, and self- service channels. Using Umeme’s award winning Umeme Mobile App, customers are now able to easily access account statements, Yaka! Tokens, information on power outages Satisfied customers and even schedule personal alerts for power outages affecting their areas. Umeme has specifically set up hail Umeme service different WhatsApp groups in its local service centres to ensure it reaches and meets these unique needs. Through these groups Umeme is able to reach customers and resolve issues faster. Away from the many glowing testimonies by In response to customers’ feedback Umeme customers interviewed for this book, about delayed resolution of technical complaints, 65 new field engineers research shows that the power distributor’s were recruited in 2017 to ensure millions of customers keep getting more faster resolution of technical faults and to further reduce the time taken to satisfied with its ever-improving service. resolve technical faults. Umeme has also received recognition for its good meme relies on the Customer Satisfaction Index (CSI) and Net Promoter online services. These include; Score (NPS) as its main measures of customer satisfaction. In 2017, Best Brand on Social Media, (Digital forinstance, Umeme’s services yielded an improvement in CSI to 65% Impact Awards Africa, 2017) and from 64% in 2016 and NPS of -5% in 2017 from -25% in 2016, according Socially Devoted Brand Award, (Social Uto a survey conducted by Research World International. Bakers, 2017). Umeme Power: Transforming Uganda 25 Umeme Awards

Umeme recognised for excellence in distribution & financial reporting respectively in 2014/2015

26 Umeme Power: Transforming Uganda Umeme MD Selestino Babungi (C) poses with staff after the company won an award at the Financial and Reporting awards in 2015

Umeme team poses with Trade Minister Amelia Kyambadde (R) after winning the Best Crisis Management award at the Digital Impact Africa Awards in 2015

Umeme Power: Transforming Uganda 27 Innovations

Inside Umeme's fault locator vehicle

Umeme’s Cashless SYSTEMS made paying convenient for customers

or years now, Umeme has been innovating to serve its customers better. One of A customer uses these innovations, the cashless office PayWay to pay strategy, has moved customer payments Umeme bills. Umeme has expanded from district offices to convenient payment options for Falternative payment channels including; Banks, the convenience of its customers 28 Umeme Power: Transforming Uganda SCADA: Umeme’s technology enabling quick fault detections

n a bid to ensure efficient supply of safe and reliable electricity, Umeme introduced a state-of- the-art technology that promptly detects faults on the grid for quick Irectification. SCADA or Supervisory Control and Data Acquisition System, is based at Umeme’s main control centre at Lugogo sub-station. SCADA helps Umeme monitor all equipment on the electricity grid such as switches and transformers to allow for prompt rectification of faults on the network in real time. Umeme technicians tracing faults using the faults locator vehicle technology Before SCADA was introduced, the power distributor struggled to reduce power losses. When SCADA Now they have been whittled down 1,000 hours in 2009. By 2017, they had was launched in 2009, power losses to 16.5%. Power outages had dropped reduced to 114 hours. stood at 33.5% from 40% in 2005. from 25,000 hours in 2006 to less than

Mobile money, Ezeeymoney, Payway which amounted to about US$ The project has been successful. Its and points of sale. 142million (Ush470 billion) per annum. main objective of removing cash from “Going cashless on all our retail These large sums of cash posed a the offices was achieved without undue outlets greatly improved our operating high risk that needed to be managed. dip in collections. Customer feedback efficiencies, improved the customer To ably manage this change, a project has been largely positive and they have experience and freed some resources team was constituted to ensure all switched to paying through banks, tied to cash management work readiness across the business and mobile money and other pay points. stream,” Selestino Babungi, the Umeme manage the transition. On the project cost side, Umeme managing director, explained. Following closure of cash collection, has been able to deliver the project Prior to going cashless, Umeme customers made a choice of payment within less than half the budget even collected payments through 31 mode based primarily on convenience after adding other contingent items like district offices across the country. This and confidence in the payment options. staff uniforms which were required to accounted for 28% of the transactions, enhance the brand.

Umeme Power: Transforming Uganda 29 AMR: Umeme’s technology curbing power thefts

meme has injected approximately US$19m in the Automated Meter Reading (AMR) technology to support its operations at metering installations. The technology remotely collects consumption and other meter data to a central location for Ubilling, troubleshooting, and analysis for management and operational decision-making. Remotely reading meters results in operational efficiency, enhanced customer service, as well as accurate and timely billing, according to John Kalyesubula, the Umeme AMR programme manager. Through the AMR project, the existing old metering installations are replaced with AMR installations in the same location. Customers where the AMR infrastructure is installed are provided with a web access portal from which they can view their consumption profiles and billing information. The advantages of AMR over the old metering installations include timely detection of energy theft, enhanced safety around the meter installations, revenue cycle improvements as well as improved customer service through timely detection and resolution of faults. By 2018, according to Kalyesubula, approximately 4,000 old meter installations had been retrofitted with AMR technology since 2014. Through this investment, nearly 60 GWh has been recovered from the new AMR installations. This translates into savings of US$7 million for the electricity sector over the four years. The deployment of the technology has also shortened Umeme’s monthly billing cycle run from 14 days to an average of 7 days hence the customers receive bills earlier and can pay on time. Although, the three phase industrial and commercial customers are just about 1.0% of Umeme’s total customer database, they account for over 70% of Umeme’s sales and revenue. As such, they contribute significantly to the company’s performance. And with this technology, industrial customers are able to compute different metrics for their internal analysis such as computing the cost of power per unit of production, An Umeme engineer doing work on the AMR system

30 Umeme Power: Transforming Uganda power supply status over a period of time et cetera via the AMR web access portal. Furthermore, through analysis of the event data available from the AMR installations, over 120 cases of power theft at customer metering installations have been identified. The culprits have been fined for tampering with the infrastructure and approximately 4 GWh has been recovered from cases of power theft. Note that the theft of power by customers represents an annual revenue loss of US$20 million for the electricity sector. In addition, it also leads to loss of human lives, destruction of Umeme network equipment and economic loss for the other customers who do not engage in the vice due to power supply outages. As a result of the success of the AMR project roll out, other electrical utilities in the region are benchmarking against it. For instance, the Energy Utility Corporation Limited (EUCL) from Rwanda and Escom Malawi have come to Uganda to learn about the roll out and operation of the AMR technology.

The advantages of AMR over the old metering installations include ● Timely detection of energy theft ● Enhanced safety around the meter installations ● Revenue cycle improvements ● Improved customer service through timely detection and resolution of faults

Umeme Power: Transforming Uganda 31 Yaka: Umeme’s game changing innovation

aka, Umeme’s prepayment system, has revolutionized not just the power distributor’s service delivery but the entire electricity sector. When Umeme entered into the 25- Yyear contract to run the distribution network in 2005, the system was dilapidated, losses were as high as 38%, power rationing and blackouts were rampant and customer service delivery was at its worst. To make matters worse, customers were not paying their bills. Only about 70% of potential revenues were being collected. Umeme has changed this. Revenue collection for 2018 remained strong, with an outturn of 100.2% registered. This performance is partly as a result of the prepayment metering code named Yaka, which since it was piloted in 2011, has continued to make Umeme’s job easier and customers happier. From the surveys carried out yearly from the time it was implemented, Yaka has always come out as the best thing that has happened for Umeme’s customers. Umeme has also become more efficient. The change from the postpaid metering system to the trendy Yaka has not only opened the business to new technological opportunities, it has come with many benefits to Umeme, the customer, and to other enterprises.

32 Umeme Power: Transforming Uganda Yaka’s benefits ● R eduction of operational costs through improved business efficiencies by optimizing operational costs of billing (meter reading, billing, bill printing, bill delivery, cash collection and money movement and security at our offices), disconnection and reconnection for credit control; and need for cash offices at Umeme business centers. ● Collection of arrears: Yaka provides the business an effortless platform through which customer debt/ Arrears can be collected through small manageable installments by setting a percentage (30%) off every credit purchase from the customer. ● Debt elimination: Yaka also provides a mechanism to eliminate debt, where the business can almost operate debt free. ● R evenue collection growth as a result of elimination of zero billing and billing exceptions; customers don’t have to wait for a bill but can continue to purchase electricity when and how they want it. ● R eduction of customers billing anomalies (zero, estimates, etc.) Zero Billing; Billing Exceptions; Target was to eliminate billing anomalies to Zero. ● P repayment improved the business cash flow. ● Increase in new connections, through a more accessible service with no security deposit charge for the Customer. ● Yaka created the opportunity for businesses to vend for Umeme. ● Customers Empowerment: To control and manage their bills- facilitating customers to reduce their monthly expenditure on energy consumption by allowing them to monitor and manage their daily usage- Control back to the customer.

Umeme Power: Transforming Uganda 33 Umeme unveiled world’s first Demand Metering technology

Have you ever heard about the Three Phase Smart Prepayment system otherwise called Demand Metering? Did you know that Umeme is the first utility company in the world to implement it?

ell, ever since Umeme implemented the technology, Ush3.5 billion is now being paid to Umeme upfront. This Whas not only improved the company’s cash flow position but has also stopped the accumulation of government utility arrears. The technology has improved customer service rating of Umeme within the government entities as they have real time access and visibility to their consumption data. Umeme technicians working on the 3 Phase Metering System 33 entities have optimized their energy usage and registered a sustained to its entities and also have visibility technical team travelled to the factory drop in consumption to the tune of of their consumption. Three phase for an engineering workshop to further Ush200 million over the period of customers could not be converted to clarify on some of the technical May to July 2017. There has been a prepayment because the technology requirements. The supplier developed registered change in customer behavior that could deliver prepayment while prototypes for approval by Umeme towards the application of the time- implementing the mentioned complex and Factory Acceptance Testing was of-use tariff. Customers like Uganda tariff associated with these type of conducted prior to mass production. Maximum Security Prisons, Luzira customers was not readily available. This technology was deployed starting have been able to offload non critical December 2016. loads during the shoulder and Peak To come up with the technology, tariff periods and also transfer some Umeme drafted functional specifications Since then, 324 installations of the activities to the off peak period and sent out a Request for Information 469 government entities have been (RFI) to suppliers to obtain information covered representing 69% of the This technology was birthed after on existing technologies. project scope. The entities converted the Ugandan government requested include President’s Office, Uganda for prepayment metering technology After evaluating the companies that Police, Uganda Prisons, Ministry in 2012 to enable them plan, manage had expressed interest, a potential of Justice, Uganda Broadcasting energy bills, improve budget allocation supplier was identified and Umeme’s

34 Umeme Power: Transforming Uganda An Underground 11kV circuit breaker used for demand pre- payment metering

324 of the 469 government entities have been covered 69% to date representing 69% of the project scope

Corporation , Ministry of Finance, single phase smart systems within the conference held in Uganda. Ministry of Education, government business in the future. In addition to the above, the PIESA hospitals, government universities, The request for the prepayment (Power Institute for East and Southern Ministry of Public Service, and Ministry system by government was to all Africa) Loss reduction committee was of Health. power distributors in the country. challenged to develop solutions in The technology will be rolled out However, Umeme pioneered its regard to the implementation of Time to other installations once Umeme deployment. Umeme has shared of Use prepayment (commonly known secures approval from the Electricity lessons and show cased the technology as demand prepayment metering) in Regulatory Authority. at the Uganda Energy Week, Future 2015. Umeme has been the first to The system can be upgraded to Energy Conference in Uganda, implement the technology among support up to 2 million customers, SARPA Conference in South Africa, the PIESA member utilities. This support single phase smart metering International Centre for Hydro Power technology can, therefore, be deployed system, and will be used to manage workshop in Uganda and PIESA by other utilities in the region.

Umeme Power: Transforming Uganda 35 How Umeme freed up capital for investment into power generation

Karuma Hydro Power Plant

36 Umeme Power: Transforming Uganda The availability of an efficient power distributor in Umeme has tremendously transformed the electricity sector in Uganda.

mongst many other positive developments, the sector is financially sustainable with minimal subsidies from the government, which has freed Aup capital to expand the country’s generation capacity. As a result, power projects that are set to be commissioned between now and 2020 will increase Uganda’s installed electricity capacity from 936MW to about 1,800MW. These include; the 600MW Karuma, 183MW Isimba and 44.7MW Muzizi power dams, amongst many others. Umeme has invested over US$ 600m of private capital and plans to invest more to evacuate this power. All this would have remained impossible if the power distributor had not been efficient. Between 2005 and 2012, when electricity subsidies were suspended, government had spent a total of Ush1.53 trillion (US$623.22 million) since 2005 on subsidies to the electricity sub-sector. Government had introduced subsidies in order to resolve a power shortage crisis. The two dams in existence at the time, Nalubaale and Kiira dams in Jinja, could not generate even 140 MW due to low water levels in Lake Victoria.

Umeme Power: Transforming Uganda 37 As a short-term counter-measure, To put this into context, the financial government decided to establish year’s budget was Ush10 trillion. So thermal power generation plants. electricity subsidies consumed 5.6% of it. By their nature, thermal plants Uganda’s total tax revenue for increased the revenue requirement for 2011/12 was expected to be Ush6.0 the sector due to the large amounts trillion. Therefore, electricity subsidies of fuel needed. Because this fuel is would take 9.2% of that. imported, the costs were always rising Yet despite meeting this cost, 92% and so were the end-user electricity of Ugandans were not on the grid. tariffs for consumers. Although the cost of a unit of Initially, government only put up electricity was Ush1,000, big and US$10 million for the thermal power. medium scale businesses were paying But by 2012, total spend on the only 18% of this price i.e. Ush180. subsidies was over US$600m. Government would top up the balance In 2012 alone, the government paid with Ush 820 (82% of the price). Ush560 billion subsidising electricity. Meanwhile, domestic (households) This was the 5th largest expenditure and small businesses would pay on the budget after education, roads, Ush385 per unit of electricity (38.5% health and defence.

38 Umeme Power: Transforming Uganda of the price) and government would top completed between now and early next up Ush615 for them (61.5%). This restoration of year. These subsidies were a huge drain on While the bulk of the money is a loan the economy. For instance, of the Ush560 the financial viability from China’s Exim bank, government billion spent on electricity subsidies, of the power sector put up part of the money. government was paying Ush430 billion This restoration of the financial for these large industrial organisations will encourage private viability of the power sector will and medium scale enterprises. sector companies which encourage private sector companies Once these subsidies were scrapped, are willing to invest which are willing to invest in different government started injecting the money in different renewable renewable energy projects, hence into the development of cheaper ensuring cheaper sources of electricity. electricity sources. energy projects, hence For example, the 600 MW Karuma ensuring cheaper sources Hydropower Project and 183 MW of electricity Isimba power dam are expected to be

Aerial view of Isimba Hydro Power Plant

Umeme Power: Transforming Uganda 39 How Umeme has doubled distribution network

capacity A Umeme engineer at the Namugongo substation

Ever since Umeme acquired a concession to distribute electricity in Uganda in 2005, the company has pumped US$600million into the distribution network. The net effect is that the networks’ capacity has more than doubled. The company continues to invest. Last year, capital investments implemented cost US$65.4million.

ohnson Okochi, the Umeme project manager, says Ush10 billion into THE Umeme is building three switching yards. The switching power system in Kasese yard at Kibito shall receive power from Nyabhuka and US$ 2.7m (Ush. 10 billion) Nsongya mini hydros and channel it to the bus bar at aimed at upgrading the Rugendabara. Then the switching yard at Rugendabara distribution in the area and J will receive power from Kibito switching station as well as put an end to incessant Rwimi, Nyakaka and Nyamba mini hydros and evacuate it outages. to Nkenda substation, Hima switching yard and to customers on the existing Nkenda-Fort Portal line.

40 Umeme Power: Transforming Uganda Umeme also installed the Supervisory Control and Data Acquisition (SCADA) technology in the area. All these works, Okochi explained, are intended to enable evacuation, integration and distribution of the power from the different generators. In total, some 150 MWs is coming on to the national grid following the completion of several small scale renewable energy generation projects being fast tracked through the Global Energy Transfer Feed-in-Tariff (GETFiT) program. Some of the projects include; Nyamwamba - 9.2MW, Rwimi - 5.5MW, Kakaka - 5.0MW, Nyamba - 7.0MW, Nsongya - 9.4MW and Nyabuhuka - 3.2MW. These mini hydros will guarantee reliability of supply. In 2010, Hima invested US$120 million and installed a state-of- the-art cement production line, which increased production capacity to 0.9 Mt per annum. Such investment is possible because there is reliable power. For instance, recently when the entire country experienced a blackout, Hima stayed The switching yard at Hima will receive power from Rugendabara with supply. as well as the existing feeder (Hima) from Nkenda substation and supply Hima Cement factory through Hima 1 feeder.

Umeme Power: Transforming Uganda 41 Sh5.4 billion spent to revamp Ishaka substation Umeme has invested US$ 1.47m (Approx.Ush5.4 billion) to upgrade the Ishaka substation and ensure more power reliability to consumers in Ishaka, Rukungiri and Kanungu.

ack of a proper switchgear at the substation caused a lot of safety and operational issues ranging from prolonged outage hours covering a wide area; faults to Lthe power transformers at Mbarara North and Nkenda Substations and frequent and prolonged interruptions of the co-generation at Ishasha. substation to feed Ishaka town and the While the works are in Ishaka, other tea estates 11kV feeders. consumers like Kanungu Tea Growers, The old substation was a completely The new works to improve the located far off in Kanungu district also outdoor substation. It had a 5MVA stand to benefit because the lines to power transformer, with two 33kV situation have included re-designing the substation to allow for future the area are connected to the Ishaka incomer Interconnectors from Mbarara substation. North and Nkenda substations. expansion; constructing a plant/control house at the substation to house the Johnson Okochi, the project There was one 33kV outgoing switchgear, metering equipment, DC manager, says previously a fault on interconnector to Rukungiri Substation, system and SCADA; installing indoor a line in Kanungu would lead to Kanungu, Ferdsult and finally to Ishasha switchgear for both 33kV and 11kV; fault all through. “But with the new generation plant. installing AC and DC auxiliary systems system,” Okochi says, each line has a There was one 11kV outgoing line and laying underground cables to cicuit breaker with proper protection that splits into two after leaving the decongest the substation. schemes.”

42 Umeme Power: Transforming Uganda He explained that the new system is also intelligent. It allows for the isolation of faulty parts to investigate where the problem is without disrupting other lines. “This system will guarantee reliable and quality supply,” Okochi said. “As a result, there will be less interruptions and outages for our clients and our sales will grow.” Some of these clients include the western branch of Kampala International University (KIU), a major institution with thousands of students, which also houses the university’s teaching hospital (KIU Teaching Hospital). Without a doubt, constant power supply brings major relief to the management and students of this institution. Apart from KIU, Ishaka at least five major tea companies. These include; Igara, West Ankole, Swaziland, Global, and Kyamuhunga Tea companies. According to Julius Bbossa, an administrator at Kyamuhunga Tea Company, they are only looking forward to steady power supply. “We hope that the substation in Ishaka will help us reduce the power challenges,” Bossa said.

Sh5 billion invested to upgrade Lira substation A US$ 1.37m (Approx.Sh5 billion) investment by Umeme into the Lira main substation will stabilize power supply in the greater north, according to Umeme’s Lira project manager Daudi Sserunkuma.

he Lira substation is the main distribution “We are likely to build more lines when more point for power in greater north, that power becomes available,” Sserunkuma said, is, Lira, Kitgum, Apac, Masindi and adding that over the last five years, Umeme surrounding areas. has refurbished all the lines: Lira-Gulu; Lira- Spinning Mills; Lira Lake Kwania; and Lira- The works, which lasted the Apac-Masindi. Lira-Kitgum is also expected Twhole of 2017, were meant to overhaul to be done. the equipment at the substation, which had deteriorated and was causing faults and “The missing link was the fixing of the power outages. switch gears,” the project manager added. “With that done, you can expect faster response The investment in the Lira substation was times because this is much better technology. Most intended to among others, cater for expectations of importantly, the faults previously caused by obsolete such power consumers, according to the project manager. switch gears will now be eliminated.” The new works on the project have involved the Mukwano Industries, the whole of Gulu, Kitgum, and Lira replacement of six switch gears and installation of three town will now be served in a much better way, the project new switch gears to provide for distribution of more power manager added. expected from Karuma and Ayago power dams.

Umeme Power: Transforming Uganda 43 Sh3.4 billion injection into Kakiri power to boost emerging industries Atwiine explained that Umeme deemed it fit to enhance With all the industries emerging capacity to meet the increasing demand on Kawanda substation within Kakiri in Wakiso district, and out-going Feeder capacity to meet the growing demand. the area is increasingly an emerging The Busunju - Kiziba and Kawanda - Kakiri feeders have been industrial hub. unacceptably long feeders at 190km and 119km respectively and still growing both in terms of load and length. s such, the existing power source and an This was resulting into monthly 36% and 42% average existing power line—Kawanda-Umeme, losses on Kiziba and Kawanda respectively, with 26.4% which has existed for the last 30 years, technical losses on Kakiri feeder according to a loss could no longer cater for the growth study. of electricity demand. This was The 5MVA at Kawanda substation was Acausing a lot of pressure on the line. dedicated to feeding Kawanda-Kakiri 11 kV Designed for a load of 3-4MWs, the feeder and the loading was 108%. line was being loaded with over 6 MWs, Kawanda-Kakiri feeder is about 80% loaded which was causing faults, technical losses and with a voltage profile (0.71-1.0)—way below the unstable supply. The neighbourhoods have grid code standard (0.9 -1.1). also expanded necessitating new lines. As such, Umeme has re-conductored Kawanda - To address these problems, Atwiine Alison, the Kakiri feeder to AAAC150, ACSR100 and upgraded the Umeme project manager for Kakiri area works, says the existing 5MVA and 10MWA transformers to 10/14MVA and power distributor has invested US$ 900,000 Approx. 15/20 MVA respectively. (Sh3.4Billion) to upgrade the line itself and the source of its power to enable stable supply of quality power for the The works on improving the Kakiri service area have also emerging industries. included installation of 11 kV bay, bus coupler, and a 33kV Bay and the associated civil works. The entire substation “Availability of stable power will motivate more people has been refurbished. A new plant house has been built to to do business and promote growth,” said Atwiine. The accommodate new switch gear to work hand in hand with the line serves between 15000-20,000 customers. Some of the new transformers. biggest customers include the Kakiri Army Barracks and Zhongkhai factory, which alone consume over 20% of the “Because of these upgrades,” Atwiine explained, “other lines load, he said. like Namulonge and Kawempe lines will also benefit.”

44 Umeme Power: Transforming Uganda Indeed, Umeme’s intervention followed Sh20 billion pumped into powering complaints regarding poor quality of Roofings Namanve plant supply. Following the complaints, a study Umeme’s investment of US$ 5million (about to understand the severity of the problem Ush20billion) into the power supply system of was carried out and it confirmed that the the Roofings Rolling Mills plant located in the severity and number of dips are far outside Kampala Industrial Business Park in Namanve the international acceptable norms and is expected to boost the plant. standards. These dips cause sensitive equipment to malfunction, thereby causing loss of he new project will reduce outages,” said Johan Botha, Umeme’s manager production and revenue. Given that the in charge of the project that was commissioned in April 2018. “On the plant only depends on a single source other hand, our client will have more production time and will no longer of power from Umeme, cases of power have to deal with losses that were previously caused by excessive dips of interruption, often meant damages to the power.” products. TRoofings established the US$120m Namanve plant in 2014, doubling its The works to address the problem output—its three production units have a production capacity of 250,000 tonnes have involved installation of a Static per annum. Compensator. This machine is expected Supplying a plant that controls over 50% of the steel merchandise in Uganda to reduce dips by at least 80%. requires ensuring steady supply. In the case of Roofings, it means availing 42 MWs constantly.

Umeme Power: Transforming Uganda 45 Roofings Rolling Mills

Roofings Group is the largest steel producer in East Africa, employing over 1,250 staff on its plant at Namanve Industrial Park to the east of Kampala, and another 1,000 on its plant on the Lubowa Estate to the south of Kampala.

46 Umeme Power: Transforming Uganda An aerial view of the Roofings plant at Namanve

Umeme Power: Transforming Uganda 47 Umeme upgrades Tororo Cement Industries power, plant doubles production With Tororo Cement Industries (TCI) increasing its installed capacity, Umeme has invested US$ 455,000 (Approx.Ush1.6billion) to avail one of its biggest customers with an additional 10MW.

he additional load meant that a dedicated production from 1.8 million tons per annum to feed was required to meet the ever- 3million tones per annum. growing demand. Umeme, therefore, Mr. Gagrani said they expect to scale up has invested the Ush 1.6Billion in production capacity with the construction order to provide quality and reliable of more cement grinding mills with the Tpower to the customer. cement storage silos, rotary packers, clinker The works here have included feeding system and clinker sheds. construction of a double circuit concrete “Our expansion has been in view of pole for a route of 6.8Km. market demand for cement both locally and Job Watti, the Umeme TCI project manager, by the neighboring countries and with the explained that the power distributor decided to expansion of the factory, we shall be in position use concrete polls, which do not rot and are reliable, to have consistence supply of cement in the market,” to ensure stable supply for their client who was putting up he says. a plant twice their previous capacity in terms of production. He added that expansion of the factory presents Morghan Gagrani, the company executive director, said opportunities for the company to export cement to the DR Uganda’s leading cement producer has injected US$30 million Congo, Rwanda and South Sudan. as part of strategies to increase its production so as to meet As such, he explained that the company was determined the increasing demand of cement in the region. to have consistence in production but was being challenged Gagrani explains that the new plant will boost the company by the quality of power that heavily affected their production. Gagrani explained that while the quantity of power was sufficient, its quality was low, which was affecting their production the reason they appealled to government to consider addressing this. Indeed, previously the installed infrastructure (power line) was not sufficient to support the ever growing load, which necessitated increasing the feeder carriage capacity through conductor size uprate. Now, a dedicated power line from Tororo Main substation provides a comparative advantage over the former 1x33kV ACSR100 7 km line from Tororo Main substation to TCI. Also, 1 x33kV 185sqmm cable of 0.1 km was installed for the incoming and outgoing line. This makes the required cable length come to 0.2 km. 1x33kV indoor feeder bay is also being installed at Tororo Main substation for TCI. “With these improvements,” Umeme’s Watti said, “the reliability of quality power will be assured.”

48 Umeme Power: Transforming Uganda and allow for future developments in the industrial belt. As such, there was also need to install a new substation. The existing substations of Tororo Rock, Nagongera and Mbale are incapacitated to take on the indicated load of 12MW. The two lines Mbale 1 and 2 from Tororo Main were equally loaded at 12.6MVA (220.9A) and 1 0.217MVA (178.8A) respectively. To meet the anticipated maximum demand, power quality, stability and reliability requirement around the fast growing industrial park, Umeme needed to boost the present supply by constructing a new feed from Tororo Main Substation and injecting another Umeme promotes industrialization substation (2X15/20MVA) at Nyakesi with Sh14 billion Tororo-Nyakesi to feed the new Hima Cement factory. Substation Umeme has invested US$ 3.8 million (Approx. Ush14 billion) into the Nyakesi substation. This investment is set to boost industrialization in Tororo.

lready, big industrial customers “We had to anticipate this, avail have set up shop. power,” Watti explained, “investment Hima Cement has set up has followed.” a plant requiring 12MVA and The new Hima Cement facility alone National Cement another is a US$40 million Grinding Station. The Arequiring 8MVA. new plant increased Hima Cement’s “This means that half of the 40MVA capacity from the current 0.9million capacity that Umeme is installing is already metric tons to 1.9 million metric tons taken,” the Umeme Nyakesi substation per year and created hundreds of jobs. project manager, Job Watti, explained. The investment helped secure He added that the capacity works supply for the ever-increasing demand have included installation of two for cement not only within Uganda but transformers of 20MVA each, seven the regional market as well. switch gears of 33kV and 5 switch gears For the plant to run, Umeme had to of 11kV. Umeme's works have already avail some 12MW in order to provide attracted investment in the area. adequate and reliable power supply

Umeme Power: Transforming Uganda 49 DISTRIBUTION NETWORK LINE CUSTOMERS REVENUE TRANSFORMERS LENGTH (KM) 2005 2018 150 1.6 billion trillion

ELECTRICITY SALES (GWh) 2005 2018 2005 2018 2005 2018 2005 2018

MV 8,479 14,105 6,000 12,045 292,000 1,208,000 1,015 2,800 LV 8,219 20,200

EMPLOYEES TRANSFORMER ENERGY LOSSES CAPITAL INVESTMENTS - 2005 2018 CAPACITY (MVA) CUMULATIVE (US$’M)

1,300 1,450

CONTRACTORS 2005 2018 2005 2018 2005 2018 2005 2018 400 2,000 550 1,900 38% 16.5% 6 m 600m

50 Umeme Power: Transforming Uganda DISTRIBUTION NETWORK LINE CUSTOMERS REVENUE TRANSFORMERS LENGTH (KM) 2005 2018 150 1.6 billion trillion

ELECTRICITY SALES (GWh) 2005 2018 2005 2018 2005 2018 2005 2018

MV 8,479 14,105 6,000 12,045 292,000 1,208,000 1,015 2,800 LV 8,219 20,200

EMPLOYEES TRANSFORMER ENERGY LOSSES CAPITAL INVESTMENTS - 2005 2018 CAPACITY (MVA) CUMULATIVE (US$’M)

1,300 1,450

CONTRACTORS 2005 2018 2005 2018 2005 2018 2005 2018 400 2,000 550 1,900 38% 16.5% 6 m 600m

Umeme Power: Transforming Uganda 51 Umeme makes electricity sector self sufficient

or Ugandans to enjoy good quality supply of electricity, it has to be generated, transmitted and then distributed. While Umeme only comes at the end of this chain, both generation and transmission depend on it as a distributor because it is the distributor that collects revenue from customers, which Fmeets the costs of all the phases—generation, transmission and distribution. Before Umeme took over the concession, customers hardly paid their bills. Only about 70% of potential revenues were being collected, and there was a very high level of electricity theft. Umeme has changed this. Revenue collection now stands at an outturn of 99 percent. The key drivers for the performance are improvements in the revenue cycle, increasing penetration of pre-payment metering and debt collection initiatives. The company has focused on improving customer service and providing multiple payment channels to customers including leveraging existing banking and mobile money infrastructure.

52 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 53 Umeme contractor staff carrying out repair works on underground cabling Umeme has reduced energy losses, saved billions achieved in 2017. Whereas the energy losses recorded in the first half of 2017 When Umeme took over Uganda’s electricity were 17.5%, losses in the second half averaged 16.9%. distribution concession in 2005, energy losses From the recently concluded were as high as 38%. 13 years into its concession, network studies on the split of the it has reduced losses by more than half to 16.5% energy losses, technical and non- technical losses currently account for 10% and 7.2% respectively of the total loss factor. nergy losses are in two forms; On the other hand, commercial Umeme has been able to achieve technical and commercial . losses are related to power thefts, this by introducing a number of loss Technical losses manifest through through illegal tapping of the networks, reduction initiatives including meter changes in energy forms through tampering with metering installations installation audits, use of technology the distribution network and and billing inefficiencies. like smart meters for large consumers; are minimized through investments in E As of this year, distribution losses billing efficiency; public awareness and network optimization. reduced to 16.5% compared to 17.5% use of data analytics to identify and focus the loss reduction initiatives.

54 Umeme Power: Transforming Uganda Responsible investment takes care of the environment

ooden electric poles have dominated the electricity distribution sector for a long time now. Yet while cheap, they pose some Wenvironmental drawbacks. Apart from leading to loss of forest cover, the chemicals used to treat these poles are environmentally dangerous. Because Uganda’s electricity distribution giant, Umeme, takes the environment seriously, it is investing in alternative poles that are less environmentally dangerous. The power distributor recently constructed and commissioned a 7km concrete pole line in Tororo to supply

Concrete poles

UmemeUmeme Power: Power TransformingTransforming UgandaUganda 55 the newly commissioned Tororo Cement Industries’ extended cement plant. This project has provided an avenue to demonstrate the adaptability of concrete poles as a replacement to wooden poles. The sector was facing a challenge of reduction in availability of mature long lasting poles, coupled with environmental degradation. The company has also been implementing its Polychlorinated biphenyls (PCB) in transformer oils testing and elimination programme. Over 1,000 distribution transformers have been tested for the presence of PCBs in 2017 alone, with 90% of distribution transformers found to be PCB free. Testing of all transformers will be completed in 2018 and disposal of PCB contaminated transformers will be completed in line with the Stockholm convention target of 2025. Apart from this, Umeme follows the International Finance Corporation (IFC’s) Environmental and Social Performance Standards and has continued to comply with the same over the years.

56 Umeme Power: Transforming Uganda Umeme MD Selestino Babungi and staff during a tree planting drive Umeme technicians working to ensure customers get safe and reliable electricity

As a company, Uganda’s How Umeme has biggest power distributor directly employs a team created thousands of about 1,472 staff. But indirectly, the company has created thousands of of jobs jobs in Uganda.

58 Umeme Power: Transforming Uganda meme has between 2,000 to 4,000 Apart from SMEs, there is an estimated contractors, who also employ hundreds 3,000 industries in Uganda. All of these rely on of thousands more. For instance, one power supplied by Umeme. of these contractors, Haso Engineers Some of these like Roofings Group, the Company, employs over 400 people. largest steel producer in East Africa, employ Assuming that on average all of U over 1,250 staff on its plant at Umeme’s contractors had 100 Namanve Industrial Park to the workers and they were just 2,000 east of Kampala, and another that is a total of 200,000 jobs. 1,000 on its plant on the Lubowa Away from the contractors, Estate to the south of Kampala. Umeme has over 1.2 million Another manufacturer, Alam customers, who range from Group, who consumes 120MW small, rural customers to large of Umeme electricity per month, industrial producers of steel and employs over 1,000 people; beverages. Regardless of the size Mukwano Groupis in excess of business, almost all of them 200,000+ of 7,000; and even Musa Body, have created jobs. an indigenous metal fabricator For instance, Umeme JOBS in Katwe employs up to 113 provides electricity to 500 SMEs Umeme has people both on permanent and in Uganda. SMEs employ 2.5 contractual basis. million people. They account for between 2,000 to Umeme also powers schools, approximately 90% of the entire 4,000 contractors, banks, telecoms, hospitals, local private sector, generating over who also employ government administration 80% of manufactured output hundreds of centres, amongst others, all that contributes 20% of the gross of which employ hundreds of domestic product (GDP). thousands more thousands of people.

Cabling works

Umeme Power: Transforming Uganda 59 How Umeme has built a competitive work force

In order to deliver great service, Umeme has created an environment where employees can thrive and are enabled to deliver sustainable organizational performance.

he power distributor is an equal Learning and Development opportunity employer with a team of about 1,472 staff supplying electricity Umeme continues to foster learning as a and delightfully giving care to over 1.1 way of life, encourages creativity, and actively million customers spread across 45 promotes and invests in the skill and knowledge Tservice centres in the country. development of every employee. One of the key aspects is enabling employees to develop the skills necessary to take up new roles within Recruitment the organization. Umeme attracts and recruits the best there Umeme supports internal career mobility is in the market with the potential, skills and by identifying redeployment opportunities experience necessary to grow the business while offering training and development sustainably. programmes. The company runs a transparent recruitment process focused on roles that drive the business Over the years, Umeme has executed objectives through the organisation structure. various programmes. These include: Umeme continues to replenish its talent pipeline with both experienced and fresh graduates through the graduate training ● Personal growth & leadership for staff programme. ● Leadership and management development for managers Umeme’s structured programme Total technicians training program for all newly recruited encourages graduates to build on their passions ● technicians and individual skills. The programme entails structured ● Customer service training for all front line staff both rotations, challenging assignments, learning and technical and non-technical development; experience working on major ● Basic & advanced metering revenue protection training projects and mentorship by management in for metering team their areas of expertise.

60 Umeme Power: Transforming Uganda Umeme technicians going through safety drills

● Data analytics and reporting for staff ● Line construction and refresher course on pole climbing ● Operating regulations for high voltage systems for both internal staff and contractors ● Transformer installation and maintenance ● Online materials management ● Performance management training ● Excel tools and formulas ● A number of staff were also trained on new work systems: Human Resource Management OICS, ULTIMA, LCS, MMS, E-power & ● Information System (HR Connect), Team Mate prepayment training for the internal Audit team among others. ● Risk assessment training

Umeme Power: Transforming Uganda 61 Umeme’s Stella Ndiwalana giving a safety brief to staff

Staff Engagement In December 2017, Umeme carried out a survey to ascertain the level of staff engagement to the business. The participation rate was 82% of the total staff compliment and the overall engagement score 81%. "Super- performance indicators whose achievement would catalyze engagement is the measure of the extent to which employees the achievement of all other business Performance indicators. are fully committed to our goals, believe in our values and want to give their best effort to our business," said Managing Communication in the business improved considerably Director Selestino Babungi. The super engagement score was with a favorable rating of 70 % in 2017 up from 59 % in 2016. 18% against a global average of 21%. This was a net growth of +11 % points across the business. The leadership index score grew from 73% in 2016 to 76% Management implemented a number of touchdown of the staff that completed the survey indicating quality and sessions including the Annual Operating Plan Cascade, WIG strong leadership in the business. This has largely been due and feedback sessions, staff quarterly business performance to investment committed into leadership development by the reviews sessions for all employees and middle management. business over the last two years focusing on the middle level The difference in this seemingly normal process was in management. the approach where the middle management was given a A total of 75 mid-level managers were enrolled to the chance to present and discuss business performance and take Franklin Covey Leadership Series over the last two years to feedback from staff other than the Senior Management Team. develop their leadership skills. This was a form of empowerment to middle management Performance Management Index grew considerably in and to equip them with the necessary skills to manage the 2017, growing to a favorable rating of 81% from 65% in business now and in the future. 2016. The growth in the Performance Management Index is attributed largely to the creation of clarity in deliverables and accountabilities across the business. Reward and Benefits Management The business in 2017 clearly identified and focused on The business continues to reward its staff appropriately the delivery of its Wildly Important Goals (WIGs). These consistent with the company business model, performance were identified as key areas of focus among all other by both the company and individual staff.

62 Umeme Power: Transforming Uganda A Senior Management team addresses Umeme staff

The business also continues to award outstanding staff outside the normal remuneration program and philosophy, anchored on a performance driven reward system. Salaries are adjusted to align with general inflation, while focusing on retention of critical talent.

Staff Performance Management The business maintains an effective and robust Balanced Scorecard Card performance management system geared to tracking staff performance, correcting performance deviation and supporting talent growth across the business. The performance management system is enabling cascade of performance to the frontline staff. Staff have an opportunity to earn up to 35% of their annual pay, through the annual performance. Umeme’s Chief Operations Officer Florence Nsubuga addresses staff

Umeme Power: Transforming Uganda 63 Umeme eliminated barriers to electricity access

Before Umeme became a power distributor in Uganda, getting connected to electricity used to be a tall order—with barriers ranging from intense bureaucracy and corruption. This was especially too frustrating for businesses.

meme eliminated these according to Badagawa, the barriers, according to private sector even asked Gideon Badagawa, government to waive tax the Executive on diesel generators to Director, Private allow for production. USector Foundation “Certainly it was Uganda (PSFU). He says even more expensive to the power distributor use these generators,” plays a significant role in he says. the growth of the private sector because electricity Currently, the country drives all businesses in the produces 862MW ahead sector. of the official launch of new power dams, Isimba (183MW), Karuma 20% Badagawa says most businesses (600MW) as government continues to ENERGY COST involved in different trades incur 20% push for industrialisation to create jobs as energy cost of total production. “So and related opportunities. efficient delivery of power to business is TOTAL PRODUCTION such a critical issue,” Badagawa says. Badagawa says efforts should be geared COST INCURRED BY towards increasing demand by attracting The environment was not always and connecting more investments or MOST BUSINESSES conducive for businesses. In 2005, consumers so that the cost goes down.

64 Umeme Power: Transforming Uganda Inside the CocaCola Namanve plant

“With the imminent addition to to further bring down power the grid from Isimba and Karuma, losses. He says most of the time as private sector we expect the Umeme is mistakenly blamed for all The challenges power situation to normalize even the mess across the power supply While it is true that most more with no further shutdowns,” chain from generation through businesses especially small he says. transmission to distribution. and medium enterprises still have challenges connecting Umeme, he says, has reduced As such, he suggests that a lot of power, for a number of large losses especially those related to sensitisation must be done to have manufacturers, access and distribution. If the transmission the public appreciate the separation reliability has been generally losses are contained too, power of roles across the electricity value resolved. tariffs will continue going down. chain. Badagawa says the bigger In general terms, Badagawa says “I know Electricity Regulatory challenge for the manufacturers Umeme is much better than what Authority still has a lot to do in this remains the cost. He says “we used to have with Uganda regard,” Badagawa says. manufacturers should be Electricity Board” especially in Going ahead, Badagawa says, encouraged to work more terms of interface with power Umeme should come up with during off peak as the cost has consumers. some innovation to bring efficacy in now reduced to 5US cents per In terms of innovations, the area of bulk metering without KWH under Ush200 per unit. Badagawa says the Yaka innovation further shooting up the compliance was a brilliant idea and has helped costs.

Umeme Power: Transforming Uganda 65 UMA commends Umeme for power distribution

Manufacturers are the biggest consumers of electricity in Uganda and the biggest drivers of Uganda’s economic growth.

n the first quarter of 2018, manufacturers’ contribution to Growth Domestic Product (GDP) increased to Ush1.18 billion from Ush1.16 billion in the fourth quarter of 2017. Manufacturers’ Manufacturers are also some of the biggest providers of contribution to Uganda’s employment opportunities and tax revenue. All this would not GDP increased to Ibe possible without electricity or proper distribution. Ush1.18 billion from According to the Uganda Manufacturers Association (UMA) Executive Director, Daniel Birungi, in as far as availability of Ush1.16 billion in the electricity is concerned, Umeme must be commended for the fourth quarter of 2017 effort to distribute power.

66 Umeme Power: Transforming Uganda Umeme has also over the years pumped some US$596 million into the distribution network

However, the sector keeps growing and its demands too. And Birungi acknowledges that distribution of electricity to a steeply growing demand due to industrial growth is definitely a good achievement that has to be highlighted. “The investments into quality of supply are visible,” he added, “there may be some pockets of low quality but we are aware there are concrete plans to solve these issues.” Previously, the situation was worse. incessant load shedding meant that manufacturers had to rely too much on thermal generators, which were extremely costly. The biggest problem was limited electricity generation but even on distribution, the lines were dilapidated and not able to serve the Inside the Bidco factory in Jinja. The company heavily relies on electricity to operate industry. As government has continued to invest in more generation capacity, Umeme has also over the years Birungi noted, however, that Umeme Further, he notes, growth in pumped some US$ 600 million into the needs to improve on the quality by population and improving incomes of distribution network. investing in good infrastructure in people as well as demand for electricity order to properly address the biting in the new urbanization hubs requires As a result, manufacturers say, they problems being experienced by more investments to manage more no longer have frequent load shedding. manufacturers today. loads expected as a result. To this “A lot of investments have to go into Due to stiff global competitiveness, effect, more investments are required quality correction and we know there the official added, manufacturers are to manage the new loads in the new is technology out there to ensure that investing in hi-tech efficient machines urbanizations.Umeme is already doing we get stable and consistent power,” that require high precision in electricity this. Birungi says. quality.

Umeme Power: Transforming Uganda 67 Most manufacturers, according to UMA, are on Automated Meter Reading systems, which are highly appreciated. The small manufacturers, like millers are on bulk metering and this extends a better tariff to them. The manufacturers association calls upon Umeme to upgrade the bulk metering technology with submetres and put in place measures to switch off submetres that are not paying up. “This will make the bulk metering system excellent,” the association notes. Most importantly the tariff is still a challenge, the association adds, especially with the large and medium industries. “We expect that there are initiatives (both structural and efficiency) by Umeme to reduce their impact on the distribution tariff for the medium, large and extra large industries,” notes Birungi. ”Lastly, we thank Umeme for their support to industries through service delivery as well as Build (Zimba) Uganda initiative. We can only appeal that the Build (Zimba) Uganda initiative is entrenched in the procurements of the distributor.”

68 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 69 Alam Group thrives on Umeme power

Alam Group consumes 120MW of electricity per month and pays around Ush75million per month to Umeme.

o a larger extent, Umeme’s of them), which cost it an extra Ush Alam Group of Companies started power has aided the group to 40million per month. business in 1967 with Casement (A) improve its efficiency and meet However, the Group says that Ltd. The Group is primarily involved in its targets. irregular power cuts occur in Kaliro the building and construction industry. Generally, the Alam Group where the company’s sugar factory is Founded by Manzur Alam, the company Tsays that power supply to its companies located. has grown business tentacles with the very aim of serving the building, is stable in Kampala amidst a few cases The company has over the years of outages. In times of power cuts, the mechanical and construction industry of invested over US$150 million across all East Africa. company runs its own generators (six its companies.

70 Umeme Power: Transforming Uganda Workers operating machines at Alam Group's Rhino Footwear Ltd

Over the years, a number of other Alam Group has many subsidiaries sister companies have been formed to including; Steel Rolling Mills Ltd, which further consolidate its objectives. is based in Jinja and manufactures hot Alam Group boasts of a wide range rolled steel bars; Saimmco Ltd, which of prized products, thus commanding Alam Group says manufactures farming and agricultural market trends across the region. implements like ploughs located in that power supply Soroti; Crocodile Tool Co. Ltd; also Other sister companies have been to its companies is based in Jinja that manufactures hoes; established in neighboring countries Alam Property Limited, which deals like KUSCO in Kenya and Casements stable in Kampala with real estate; Casements (Africa) Africa Limited in Kigali, Rwanda. amidst a few cases Ltd; a major player in the aluminum and The Group, one of Uganda’s biggest of outages. steel fabrication sector; Roofclad Ltd, taxpayers, is also one of the biggest which makes wire products; and Kaliro employers. About 776 people are Sugar, established in 2011 with the aim employed in Sugar and Allied Industries of meeting the regional sugar deficit Limited and another 250 in the other and give Uganda sugar it requires at companies like Casement (A) Ltd, affordable cost. Rhino Footwear, Oxy Gas and Alam Group Ltd.

Umeme Power: Transforming Uganda 71 Umeme’s power is stable — Nile Breweries

72 Umeme Power: Transforming Uganda ganda’s biggest beer brewer—Nile Breweries Limited “There has also been an improvement in communication (NBL)—has over the years invested hundreds of from the Umeme team in case of power outages and failures,” millions of dollars and created thousands of jobs in says Alfred Balikagira, the Business Operation Director, NBL. the country. Umeme power is very critical for NBL. When it is not Owned by SABMiller Plc, the world’s 2nd largest available, the company has to spend twice as much money Ubrewer, NBL’s Mbarara and Jinja plants have a combined on diesel power. Apart from this, a power outage also capacity of 2.4 million hectoliters of beer, which makes it the means machine down time leading to production loss as well No 1 provider of locally- produced beer in Uganda. as electrical equipment failures. A lot of this has not been NBL produces Nile Special, Club Pilsener, Eagle Lager, happening because Umeme has invested into the grid making Eagle Extra, Eagle Dark, Nile Gold, Castle Milk Stout and it more stable. Redd’s. Other products include Redd’s Vodka Lemon, Castle Before these investments, the company experienced Lite, Chairman’s ESB and Chibuku. It imports and distributes multiple scheduled load shedding especially in 2010. Castle Lager and Grolsch in Uganda. The company also owns “Compared to the current situation it was quite a huge cost,” Rwenzori Bottling Company, the producers of Rwenzori Balikagira says, “Stable power supply reduces our cost of Mineral Water. production and emissions resulting from running generators.” As a major manufacturer, NBL depends a lot on power As such, NBL calls upon Umeme to improve on the and spends over Ush700 million on electricity every month. voltage surges and maintain proactive communication. The While NBL experienced unstable power between January company is a major taxpayer—it paid Ush280billion in taxes and March this year, the beer brewer notes that after further last year. Overall, it employs about 350 in manufacturing staff. engagement with the regional Umeme team, this was rectified By facilitating NBL’s operations and expansion, therefore, and the supply has been stable except for a few interruptions Umeme has indirectly contributed to creating jobs and during planned maintenance shutdowns. ensuring government collects more tax revenue.

President Museveni at the launch of Nile Breweries Mbarara plant

Umeme Power: Transforming Uganda 73 Stable power supply behind Mukwano Group’s success

mproving work efficiency and timely manufacturing of several fast moving consumer goods requires stable supply of power. Umeme has been ensuring this and as such, has contributed to Mukwano Group’s success. I The Group buys and uses about 3 million units of electricity supplied by Umeme and pays a bill of approximately Ush1.2 billion per month. In times of power cuts, the Group spends twice the amount it pays to Umeme on a monthly basis. The group, therefore, believes that maintaining power supply is important to driving down its operational costs and boosting its growth and expansion. The group also believes that further reduction in tariffs for the industrial sector by the regulator (Electricity Regulatory Authority) is critical for enabling expansion of plants which come with opportunities like new jobs and more tax remittance to government.

Strength of the Group The Group is one of the leading conglomerates in Eastern and Central Africa. Its origins go back to 1910 when members of the family first set foot in East Africa and established a trading company. The business has grown and expanded to deal in sectors of agriculture, manufacturing, property development, logistics, supply chain management and packaging. Workers on duty at one of the Mukwano factories

74 Umeme Power: Transforming Uganda Inside of one of Mukwano's manufacturing plants

It produces high quality and affordable fast moving consumer goods that include laundry and toilet soaps, edible oils and fats, power detergents, domestic and industrial plastics and packaged drinking water. In terms of its contribution to the economy, the Group ranks among the top 10 taxpayers in Uganda and employs in excess of 7,000 staff whilst ensuring the highest environmental, health and safety practices are adhered to and maintained in all production and operational procedures.

Mukwano's mineral water processing plants

Umeme Power: Transforming Uganda 75 Mutual benefit behind Umeme- Hima relations

The new Hima Cement factory in Tororo

76 Umeme Power: Transforming Uganda ima Cement is one of the biggest consumers of electricity power in Uganda. The company has a plant in Kasese with an average annual Hconsumption of 95,000MWH. The new Tororo Grinding Station that has increased the manufacturer’s production capacity to 1.7 million tonnes, will increase power consumption by 14,000MWH in 2018 and an average of 25,000MWH a year in the future. The third industrial site, the Namanve Blending Station, has an average annual power consumption of

Trucks at a Hima Cement plant

Umeme Power: Transforming Uganda 77 Hima Cement ANNUAL CONSUMPTION

134,000MWH Last year, Hima set up two big projects, our Tororo Grinding Station and Namanve Blending Station, both of which the Umeme team was able to Kasese Plant 95,000MWH support with power supply. "The start-up in Tororo was Tororo Grinding Station 25,000MWH difficult but we have since stabilized and Umeme has provided support to Namanve Blending Station 1,680MWH achieve it," George said. "The biggest improvement we need is the quality and stability of electricity supply at our Hima plant." 1,680MWH. In total, Hima consumes Such challenges have a huge impact To resolve all these challenges, an average of 134,000MWH per year. on the capacity of the plant but also on Umeme has invested US$ 2.7million the production cost due to repeated “We have developed good working (about Ush10 billion) into the power start-up of equipment. relations with Umeme and successfully evacuation infrastructure in the area. started our new factory in Tororo,” said George noted that cement Johnson Okochi, the Umeme Nicholas George, the Hima Cement production is an energy intensive project manager, says that one of these CEO. However, George also noted process - energy cost represents up pieces of infrastructure is the Hima that the company has been suffering to 20% of the total cost of cement switching yard for customers on the from deterioration of power supply at production. existing 33kV Nkenda-Fort Portal line. the plant in Kasese.

78 Umeme Power: Transforming Uganda Hima Cement employs hundreds of people at its three installations

This switching yard at Hima receives power from Rugendabara as well as the existing feeder (Hima) from Nkenda substation and supplies Hima Cement factory through Hima 1 feeder. Apart from this switchyard, other works have included; installation of cables, the Supervisory Control and Data Acquisition (SCADA) technology. All these, Okochi explained, are intended to enable evacuation, integration and distribution of the power from the different generators. Okochi said this investment will guarantee more capacity and reliability in terms of supply and flexibility in network operations.

Umeme Power: Transforming Uganda 79 Umeme powering industrial parks

The Kampala Industrial and Business Park (KIBP) requires 100 MWs of electricity. Umeme has invested in the distribution infrastructure required to supply it

80 Umeme Power: Transforming Uganda s recently as the mid-2000s, Namanve located along infrastructure to improve supply reliability and support this the Kampala-Jinja highway, was a bush teeming with industrial growth countrywide. wild animals. Today, large trucks carrying all sorts In order to sustain and increase their production, of merchandise enter and emerge out of several these companies require efficient, high quality and reliable industrial complexes that make up the Kampala electricity supply. In total, all the industrial parks are expected Industrial and Business Park (KIBP), 15 kilometres outside the A to consume about 450 MW according to data from sector Ugandan capital. regulator, Electricity Regulation Authority (ERA). KIBP is one of the 22 parks that government is establishing John Francis Kirudde, the Umeme senior manager to accelerate the country’s industrial growth. 11 of these have for special projects, says the power distributor aims at already been completed, according to Evelyn Anite, the State expanding infrastructure in the business park to meet the Minister for Investment. needs of these industrial customers. At KIBP alone, companies such as Roofings Rolling Mills, KIBP alone requires over 100 MWs and the supply of Hima Cement, Plascon, Victoria Seed Limited and Coca this power is meant to be via a high capacity 132/33KV Cola among others, have already established plants. These substation to be built and commissioned by the Uganda companies are creating millions of jobs and paying billions in Electricity Transmission Company Limited (UETCL) by taxes. December 2019. But all this would be impossible if power distributor The current supply lines near the industrial park are the Umeme, was not investing into the necessary distribution 33kV (Namanve – Bweyogerere Industrial) and the 11kV line

Umeme Power: Transforming Uganda 81 An aerial view of the Kampala Industrial and Business Park (KIBP)

(Kireka – Seeta) that supply loads that are majorly domestic in nature. “The inadequacy of these feeders to supply power to Kampala Industrial Business Park prompted the need to construct a double circuit 33kV ring from Kiwanga substation to supply these industrial customers until such a time when the transmission infrastructure shall be available,” noted Kirudde. The capacity of the 11kV line is 6.8MW and is currently operating at just 55% of its capacity. The new 33kV will carry a higher 20MW appropriate for mega power consumers in the park. Umeme is investing to make sure the supply is not only stable and reliable but safe too. Kirudde notes that a local contractor, International Energy Technique (IET),

82 Umeme Power: Transforming Uganda Improving local content in large projects Kirudde says it is Umeme’s policy to improve has already worked on what will be a first of its kind the capacity of the local services sector in its extensive underground network of about 29km projects. He notes that the contractor for the within the industrial park. KIBP – IET is local. “As Umeme policy, you can “We are going to go 1.8m to 2m deep only subcontract to contractors on Umeme's underground. The only threat to this network is prequalified list. Those kind of contractors that vandalism, but we are working with the Police to build the lines are all local contractors,” Kirudde curb this,” Kirudde says, noting that the underground says. system will be remotely monitored by Umeme’s IET has started doing civil works at the site control center. of Umeme’s Namanve substation and that the He notes that it is unsafe to run overhead switch gear has already been established at the electricity lines in the industrial park due to the Namanve substation. By the end of the first several storied buildings in the area. Besides that, he quarter of 2019, the project to improve the says that overhead networks are not as reliable as distribution network in the industrial park and underground networks and yet the industrial park increase supply from 26Mw to 50Mw will be done. needs reliable power. Apart from KIBP, there is Tororo Industrial Kirudde says although UETCL is going to improve Park, where three major cement plants have been electricity supply to the industrial park, they will still established and Umeme has already established require Umeme’s robust distribution network to the requisite distribution infrastructure. It is supply the electricity to the consumers in the park. anticipated that these parks could create an estimated one million jobs by 2021.

Umeme Power: Transforming Uganda 83 Umeme Customers

84 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 85 Umeme: Powers 500 SMEs, drives economic growth

Small scale artisans depend on Umeme electricity to operate Youths working at a timber workshop in Kampala

Small and Medium Enterprises (SMEs) are the unsung essential providers of jobs and engines of economic growth. Indeed, largely on account of SMEs, Uganda’s economy has been growing at an average rate of 7% for the last 30 years.

he Micro, Small, and Medium, than 5 people and their total assets do not and trade, 10% in manufacturing and 8% Enterprises (MSMEs) are the exceed Ush 10 million. in other fields, according to the Uganda engine of growth for the economic Investment Authority (UIA). On the other hand, small enterprises development, innovation and employ between 5 and 49 people and total They employ over 2.5 million people, wealth creation of Uganda. assets between Ush10 million and not where they account for approximately TAccording to the Uganda Bureau of exceeding Ush 100 million. 90% of the entire private sector, generating Statistics, enterprises are categorized based over 80% of manufactured output that The medium enterprises therefore, on any of the following criteria: number of contributes 20% of the gross domestic employ between 50 and 100people with employees, capital investment and annual product (GDP). total assets of more than Ush100 million turnover. but not exceeding Ush360 million. Umeme powers 500 of these SMEs in In quantitative terms, micro enterprises Uganda and has as such been promoting SMEs are spread across all sectors with are those businesses employing not more economic growth through them. 49% in the service sector, 33% in commerce

Umeme Power: Transforming Uganda 87 Some of the products manufactured by Musa Body at their workshop in Katwe, a Kampala suburb

adad Ssebuza, who runs the facility, says the constant power supply has enabled Umeme power them deliver clients’ orders on time. HA few years ago, Ssebuza applied boosts Musa Body’s for the Commercial ─ Three Phase system that has seen his power bill drop to Ush600,000 and improvement productivity in supply and reliability. With the constant and regular supply of power, Ssebuza is able to make a range of machinery and gain Musa Body manufacturing and trading company access to markets across borders. is easily one of Uganda’s biggest indigenous Its products range from agro- machinery, food production lines, machine manufacturing companies. construction machinery, and vegetable processing machines, among others.

88 Umeme Power: Transforming Uganda A Musa Body staff shows off some of their products

In 2013, Musa Body Machinery and National Agricultural Research Organisation (NARO) invented a pelleting machine that enables farmers process animal grass that can last for a much longer time, compared to animal feeds such as hay. With sales of over US$1million, Musa Body supplies clients in countries like Kenya, Tanzania, Rwanda, Sudan, Burundi and DR. Congo. “The constant supply of power enables us to beat deadlines of orders since we mostly use machines to cut, bend, punch, shape, roll and make any machine,” said Ssebuza. With growing sales, Ssebuza is positive about growth of the business. Currently, Ssebuza employs up to 113 people both on permanent and contractual basis. He is in the final process of applying for the Yaka system, which he hopes will reduce their bill at the office premises. “The system will allow us to conveniently manage and control electricity since it allows maximum control and monitoring of electricity consumption,” said Ssebuza. In future, Ssebuza plans to expand the business by increasing production and starting a training facility to pass on technical skills to the thousands of jobless Ugandans. Musa Body relies on electricity to fabricate these products

Umeme Power: Transforming Uganda 89 Umeme supplies us sufficient power, says Nyakatonzi growers cotton ginnery

Established in 1957, Nyakatonzi growers’ ginnery is easily one of the leading processors and exporters of cotton in Kasese district. Thousands of farmers rely on the facility to process their cotton.

he ginnery depends mostly on electricity supplied by Umeme to run the machines that do all its work. During production time, the Tginnery employs about 250 casual workers where as during off peak 45 permanent staff do mostly technical tasks. Paddy Neddala, the production manager, says that Nyakatonzi ginnery requires between 14,000 and 25,000 units of electricity to operate successfully every day. “The power we get is sufficient because we have our own transformer though sometimes it is targeted by thieves who steal oil from it and it stops working.

90 Umeme Power: Transforming Uganda Machines running on Umeme power at the Nytil Southern Range Nyanza Textiles plant in Jinja

Otherwise when we have stable power the work is done smoothly,” Neddala said The official says payment of the electricity bills is easy because the company has an account with Umeme and money is transferred through the bank. In the 2017/18 season, Nyakatonzi ginnery produced 885 tones of cotton lint though the production has been going down because of bad weather conditions. The only challenge they have got with electricity supply is sometimes the low or high current which makes them lose money in paying workers who remain redundant on such a day.

Umeme has addressed this challenge by Workers making military uniforms at the Nytil investing in the area's distribution infrastructure. Southern Range Nyanza Textiles factory

Umeme Power: Transforming Uganda 91 A worker monitoring chicks at the Biyinzika International Poultry farm Reliable power facilitates Biyinzika’s expansion

aving started as a small family poultry farm in 1990, Like many other companies, the plant expansion has been Biyinzika Poultry International Limited is now one of facilitated by a steady power supply from Umeme. the biggest companies in Uganda with a turnover of Ush 70 billion. Indeed, Gian Conforzi, the company Commercial Director ,says due to the constant and reliable power supply, they Largely known for supplying day-old chicks, the budget for only 48 hours of supplementary power per month Hcompany has since expanded after being acquired by private but this is hardly used. equity investors. “It is only company policy to budget for supplementary The company’s main manufacturing plant is located in power from generators but we don’t use that much,” Conforzi Mukono, with the feed mill stationed at Katega near Seeta says. and the farm at Njeru towards the lake.

92 Umeme Power: Transforming Uganda The investment into the company by private equity For the future, BPL looks at sticking to its core mandate investors facilitated its expansion and resulted in an of producing chicks and broilers but also diversifying to increased hatching capacity, installation of a new feed include a range of products like fish and animal feeds. mill and storage silos as well as the establishment of a “We have also diversified the feeds from only complete commercial broiler farm. feeds to including concentrates and macro mixed feeds The company also increased the hatching capacity for so that farmers can have the opportunity of buying and day old chicks and installed a new feed mill worth US$6 mixing in their feeds,” says Conforzi. million, currently doing about 50,000 broilers a week, “We are also looking at export markets such as Kenya 300,000 broiler hatching eggs per week and 100,000 layer where there is a big demand for our products like chicks hatching eggs per week. and feeds.” The capacity of the two hatcheries currently stands Conforzi, however, points to the increasing cost of at 1.6 million eggs per month. But according to Conforzi, power that should be dealt with to support the growth the working of all these establishments is only made of the poultry sector as a whole. possible by the reliable and constant power supply in the areas of operation. “We have experienced an increase in the power bill of recent and the general feeling is that power is a bit The company employs 650 staff and consumes up to expensive than it should be,” Conforzi noted. 15,000 tons of maize annually, 3,000 tons of soya and about 1500 tons of sunflower from Ugandan farmers.

Inside one of the facilities powered by Umeme electricity at Biyinzika Poultry International

Umeme Power: Transforming Uganda 93 Umeme power reliable — Mbale millers

aidi Nangwe, the proprietor of UPDF Wewula, who employees 17 workers, said Millers in Industrial Area, Industrial nowadays, unlike before, power blackouts Division, Mbale Municipality, employs are a rarity. over 30 casual and technical workers Wewule says their power demands vary in his business. according to seasons. “In January business, is S“Most of my employees are youth, who very slow because most farmers do not have are committed and dedicated. They are the produce but it raises during months of willing to work for long hours and I am August, when they have harvested,” he said. happy that I have contributed positively to He explained that in the month of August, job creation especially in this town,” he said. they can mill over 300,000kgs, which requires His business consumes about 2,800 units approximately 2,000 units of power usage. of power worth Ush15 million. The power Wewule who uses close to Ush9 million supplied by Umeme, he says, is more reliable. in a month during the busy season, says that “Power blackouts are no longer much of he would like Umeme to reduce power a challenge like it used to be,” Nangwe says. tariffs. “We are happy. It is no longer like those days “The cost is too high for us and when power blackouts were the order of government should help cut on these rates the day. Even when it goes, we wait for at to at least 200 a unit for us businessmen,” least one hour and it comes back.” he said. Another businessman, Bakari Wewula, According to Nangwe, in 2014, they came the proprietor of Bumadada Millers in together as millers and formed an association Mbale town says before Umeme took over so that they could benefit from a discount on the distribution of power, services were power tariffs but nothing has changed so far. very poor and there were frequent power blackouts. Nangwe said ERA should respond to their plight because their businesses depend “There were frequent blackouts, power mostly on power. theft and concerned officials normally took weeks to respond when technicalities occurred,” he said.

94 Umeme Power: Transforming Uganda Maize mills like this, powered by electricity supplied by Umeme, employ thousands of people

Umeme Power: Transforming Uganda 95 Umeme growing small businesses

When many think of electricity and impact on business, they normally think medium and large scale industries.

arely do they think of small business. Yet while individually, these do not employ many people, millions depend on them for a source of livelihood. Such businesses include small saloons, shops, phone charging kiosks, small bars and restaurants, maize and millet Rgrinding plants, welding workshops, among many others. These tend to be majority of the businesses in rural areas and even urban centres. By availing power to them, Umeme has been growing these businesses and enabling millions of Ugandans across the country to get a source of livelihood. Away from Twebaze and others who do similar In Hima Town Council, Kasese District, for instance, Annette business, those whose businesses operate big Twebaze, a shopkeeper, said Umeme’s constant power supply, machinery are also excited about the promise of would be the best news. more reliable power supply. Twebaze sells domestic merchandise and soft drinks in her shop. One of these is Nkufu Lingola of Rwenzori Youth She says power blackouts often mean lost business. Skills Development Association, which deals with welding, metal fabrications, fitting and machining “Hima is generally a very hot area,” she says. “People want to doors, windows, glasses among others at Maliba take very cold drinks, when there is no power, the fridges are not Trading Centre in Maliba Sub-county. working and so we are redundant.”

96 Umeme Power: Transforming Uganda Small businesses like Hairby Zziwa Saloon at Kisementi heavily depend on electricity to operate

“We are an electric-power in Kasese, a stable electricity power that makes the situation worse for business,” Nkufu said, “When there supply is a major requirement. us.” Without giving figures, Nuwagaba is no electricity, we close and go for revealed that power blackouts would In Ishaka, Ambrose Nuwagaba, the other things.” double the station’s cost of operation news editor of Crane Broadcasting if Umeme had not stabilized supply in Lately, business is booming due Limited, said electricity load shedding the area. Other businesses concur. to the increased construction of in the town greatly affects their permanent houses in the area. operations as a young radio station. Daniel Obuku, who runs a welding workshop along Olwol Road in Lira Given that welding and metal “As you may be aware,” Nuwagaba town, has been decrying a situation of fabrication is a fast-growing business said, “the prices of fuel have risen lately, constant power outages, saying because

Umeme Power: Transforming Uganda 97 Welders heavily rely on electricity supplied by Umeme

Their crisis could be a thing of the past. In most of these areas, Umeme is investing in the distribution infrastructure and making power supply more reliable.

of it, his business has recorded He has another problem—some losses until Umeme revamped the of his other electrical appliances Lira substation. cannot run on the generator. “Power blackouts were a major “When there is less power, problem for me but no more,” said it means I will not be using all my Obuku. computers, so I make less money,” Jacob Ogwang, another said Ogwang. businessman who operates an Their crisis could be a thing of the Internet café along Obote Avenue past. In most of these areas, Umeme said he has to use a generator to is investing in the distribution run his business whenever power infrastructure and making power goes off. That is problematic as it supply more reliable. increases his costs of doing business.

98 Umeme Power: Transforming Uganda An Umeme customer uses the Umeme App to access services as she attends to her stall at one of the markets in Kampala

Umeme Power: Transforming Uganda 99 Mestil Hotel in Nsambya, a Kampala suburb

100 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 101 Umeme lights up Mweya Safari Lodge

major service provider in any community save for the Police and Mweya Safari Lodge is not yet the tourism industry, Mweya UPDF that provide security around. subscribed to the Yaka system of Safari Lodge heavily relies on According to Lubega, Mweya Safari payment but they do not have to line electricity to run the equipment Lodge has their own transformer and up at Umeme offices since they pay and other services like cooking, consumes between 40,000 to 50,000 through the bank. lighting and water pumping. A units of power every month. The lodge, which employs over Simon Lubega, the assistant “Sometimes there is a breakdown 100 people, is found deep inside the electrical engineer for the facility, says in supply especially when the poles Queen Elizabeth National Park in the supply of power by Umeme is fall under bad weather but Umeme is Kasese district. The facility is known direct to the facility since it is isolated always swift by reacting quickly since for hosting tourists both local and and does not share electricity with we are in the national park.” international tourists.

102 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 103 Tourists who stay at Mweya enjoy game drives Quality services by facilities like Mweya saw tourism and hot air balloons with the guidance of the Uganda revenues soar to Ush 5.1 trillion (US$1.4billion) in Wildlife Authority to track different animals especially 2017 when the country attracted over 1.3 million lions in their hideouts. international visitors. In 2007, the number was only To deliver distinguished services to the visitors, 650,000. This represents a growth of 106%. At Mweya Safari Lodge requires a steady supply of this rate, the sector is expected to achieve the four power. million mark by 2020.

104 Umeme Power: Transforming Uganda Quality services by facilities like Mweya, which is powered by Umeme, saw tourism revenues soar to Ush 5.1 trillion (US$1.4billion) in 2017 when the country attracted over 1.3 million international visitors

Umeme Power: Transforming Uganda 105 The Main Building at Makerere University. The university spends an average of Shs360 million per month on electricity Umeme enabled Makerere save billions in power bills

Uganda’s oldest and biggest university, ntil 2010, the university used to spend more than Ush400million on electricity Makerere University, has a student per month or Ush4.8billion a year. On top body of about 35,000 undergraduates, of this, in case of an outage, the university would spend up to Ush15million per day 4,000 postgraduates and over 3,000 Uto run the generator because there are facilities administrative staff. that needed to keep running.

106 Umeme Power: Transforming Uganda At the main campus alone that sits on about 300 acres of land, there are nine halls of residence, a post graduates' hall, lecturers’ residences, lecture theatres, offices and the library. Established in 1922 initially as a humble technical school, Makerere University is one of the oldest and most prestigious English Universities in Africa. In January of that year, the school, which was later renamed Uganda Technical College, opened Students inside the computer laboratory at Makerere University its doors to 14 day students who began studying carpentry, building and mechanics. Since 2010, however, steady power money to ensure that we are not cut On July 1, 1970, Makerere became an supply by Umeme and a switch from off as we prepare the next payment. independent national university offering ordinary to the bulk metering system He says prepaid helps them plan undergraduate and postgraduate has whittled the bill down to an average better. Even though there’s a credit courses leading to its own awards. of Ush360million per month, according function on the Yaka meter, it has never With Umeme’s steady and affordable to Darius Muwanguzi, the Assistant been an option for the institution, power supply, Makerere continues to Estates Manager at the University’s according to Muwanguzi. He says the facilitate academic excellence not just Department of Estates and Works. new system gives alerts so you will in Uganda but globally. This bill arises from the whole definitely know when the account is Also, Makerere produces 95% estate including the University’s School running low. of capable human resource that has of Public Health at Mulago and the Makerere offers day, evening and delivered the impressive performance Agricultural Research Institute in external study programmes. It is also a of the utility. Umeme runs a graduate Kabanyolo. Muwanguzi says at the main very active center for research. programme that aims at recruiting 100 campus, there are two meters and young engineers annually; a bulk of With such population and more than eighteen others are at the them from Makerere University. various departments. activity, inevitably electricity is a vital component of its operations. Muwanguzi explains that with bulk metering, usage of power is now measured by a centralized meter reader. The University consumption range was elevated to another tariff category known as Code 30, which is a high voltage supply to large industrial users whose benefits include lower average tariff per unit. Before then, each of the university's facilities was charged at a retail rate. Now, even the Ush360 million Muwanguzi says is quite a skewed amount and that they could be spending less than that. “We are on Yaka. With this prepaid method of paying, we usually add extra Makerere University library at night

Umeme Power: Transforming Uganda 107 Education: Umeme powers 2,004 schools

There was a time in Uganda when it was very common for children to do home work under candle light. In several cases, these started fires resulting in death or lifelong disfigurement.

ack of electricity also often meant that students missed multiple services including lighting, which enables classes to be taught early in the morning or late at night, access to ICTs into the Lclassroom such as computers and televisions, among many others. As it makes more and more connections, Uganda’s biggest power distributor, Umeme, As Umeme increases connections many pupils no longer is reducing these unfortunate situations. It have to rely on candle light to revise their books currently powers some 2,004 schools across the country. 108 Umeme Power: Transforming Uganda Pupils studying on computers at Kabale Preparatory School

While this is a small portion compared to the number Studies also show that schools without electricity tend to of schools Uganda has, it is a huge leap before 2005 when perform more poorly than their electrified counterparts. Umeme got the distribution concession. A study by Steward Redqueen in Uganda revealed that The 2,004 schools have a myriad of advantages. Studies households in connected parishes spend three and a half times have showed that electrified schools can enable principals as much on education compared to the ones in unconnected to recruit and retain better qualified teachers, and have parishes. In the parishes with electricity access, 50% of the been correlated with improvements on both test scores and children in primary education are enrolled in schools that graduation rates. have access to electricity. For the children in the unconnected As one study states, electricity “allows the access of lower- parishes, this figure is only 4%. income people to lighting, communication, as well as a variety of educational delivery opportunities”.

Umeme Power: Transforming Uganda 109 Prepaid meters saved Mulago from darkness

ulago National Referral Hospital’s planned reopening was highly anticipated by ordinary people and administrators. mulago hospital monthly power bill David Nuwamanya, the hospital’s principal administrator, for instance, could not wait to Mexperience the ease with which they would do their work Ush270million when the new refurbished facility opened. “Those stories of Mulago in darkness for eight hours, a birth being done using a torch are now history. Those days we would be worried about what other thing we will be telling the public if power goes off,” he says boasting of how they now have sustainable power and yet the situation is about to get even better. Those stories of He says going forward, there is a chance of having power Mulago in darkness all the time because they have installed capacity of three for eight hours, a Megawatts. He adds that they now have clean power because it has been stabilized. birth being done The plan is to have power that is not tapped into by other using a torch are users. They have two dedicated lines from Mawanda Road now history substation for the supply of power to the hospital and have installed two new transformers and two high voltage panels. David Nuwamanya, Mulago Hospital principal administrator Previously they had one panel that would not isolate the entire hospital. With the new installations they are able to get power to just one place where they want to use it, be able to

110 Umeme Power: Transforming Uganda Away from lighting, Mulago National Referral Hospital relies on steady electricity to operate complex equipment used in saving lives switch off in another place and leave the others powered. The beauty with this, is that should one area have an issue it would be easy to rectify unlike before where a problem at one part of the hospital would leave the entire place in darkness. It is not just darkness that they suffered. Nuwamanya recalls 2007 and 2008 when the hospital suffered constant power outages partly because they had challenges clearing bills and load shedding. “Everything was in negative. Apart from resorting to the only generator all the time, theatre lights were blowing, Inside a well-lit facility at the new Mulago Hospital complex

Umeme Power: Transforming Uganda 111 air conditioning failed and voltage panels kept burning. Socket sparking was also very common so we were always fixing things. Our expenditure went up. At some point we went three days without power”, he said. “The arrival of prepaid meters saved us all that. Even if we get power on credit, it helps us to plan.” Mulago has an average electricity bill of about Ush270 million per month although they are budgeted to spend Ush477 million per quarter on power. The hospital, which is the country’s biggest had a total bed capacity of over 1,700 before it closed for repairs in 2014. It is now a super specialized facility carrying out major operations that were hitherto referred abroad. As such, the facility has ferried in huge equipment that requires a lot of power to run. For instance, an MRI scan – a machine that uses large magnetic and radio waves to look at organs and structures inside the body as installed at the facility. By its nature, there has to be constant supply of power 24/7 for the magnet to operate. Now, the hospital anticipates to be spending Ush300 million on electricity per month or about Ush10 million per day. But Nuwamanya says such a figure can only be anticipated because the pre-paid system has enabled them to separate meters of the whole complex from those of each institution like the Cancer and Heart Institutes. These now have separate meters and settle their own bills. If they had to use the old system now, he says, they would be planning to have bills as high as Ush700 million every month since the scope has widened. In the mortuary alone, for Dr Jackson Orem, the Executive Eirector, instance, where they used to have 12 Uganda Cancer Institute explains how the cancer fridges, they now have 180. treatment machine operates at the Mulago-based Institute

112 Umeme Power: Transforming Uganda Umeme Power: Transforming Uganda 113 Power saving lives at Fort Portal Hospital

t the oxygen plant house of Fort This was not always the case. Until last it is available, at least, for most of the time. Portal Regional Referral Hospital, year, the hospital depended on Mbarara Fort Portal hospital is one of Uganda’s technician Simon Murungi takes or Mulago hospitals for oxygen refills as 387 hospitals powered by the power two days at the neatly kept and supplies from the National Medical Stores distributor. were never enough. cordoned off facility to fill the gas “Whenever power is off nothing Acylinders in preparation for supplying the Today, the plant produces 15 cubic happens here”, Murungi says. wards here and for other health facilities. meters of oxygen per hour, which is The hospital’s Deputy Superitendant enough to cater for the hospital in addition This oxygen plant supplies the seven Dr. Oscar Kaliisa says they spend between to the Health Center IVs in Fort Portal districts of Kyenjojo, Kamwenge, Ntoroko, Ush20million and Ush25million every and the other districts. But for this to Bundibugyo, Kyegegwa, Bunyangabu and month on power. The biggest part of the happen, there has to be constant supply of Kabarole that the hospital serves. bill is due to the fact that the plant has to electricity. And Umeme has been ensuring be on consistently to serve its purpose.

114 Umeme Power: Transforming Uganda Fort Portal Hospital is one of Uganda’s 387 hospitals powered by Umeme

The hospital receives about 245,000 outpatients and handles 30,000 admissions every year. In addition to this, they house the regional blood bank, and according to Kaliisa most of the 6000 referrals that the hospital gets are for patients who need blood transfusion. The blood bank too can not operate without power because blood has to be kept under the cold chain. The hospital also has four prepaid Yaka meters at the Interns section, the orthopedic department, the Mental Health Department and the General Hospital. In addition, there are staff houses rented by the hospital at Rwengoma on the outskirts of Fort Portal town billed using the postpaid metering system.

The OPD and accident unit at Masaka Regional Hospital

Umeme Power: Transforming Uganda 115 Two years ago, the hospital migrated from the old postpaid metering to pre- paid, which according to Kaliisa has enabled them to plan for proper power usage. The only challenge, he said, is that they had accumulated a lot of credit that once they load, the debt is deducted. In fact, Murungi who keeps monitoring the meters says the hospital would not be spending more than Ush20million per month on power but the challenge is that money for utility bills is released quarterly and at times not in a timely manner prompting them to request Umeme to give them power on credit because they can not afford an outage. “We felt the pinch when we had an outage once,” Murungi says. “We used a generator all through. The cost was too high that we had to call off some services. We only resumed when power was restored.” Whenever power is off, they do Steady electricity supply is very critical during surgery operations not use the oxygen plant, for instance, because of the enormous bills that can create. For a day without power, Kaliisa says the hospital uses about 150 liters of fuel each for the two generators. At the current rate of Ush4,000 per liter, that is easily Ush1,200,000 per day for the two generators. Now, he says, the hospital is working to ensure that the staff house is also connected to Yaka. A new power line and substation have been commissioned in Kanyambeho to ensure better supply in Fort Portal and surrounding areas.

Medical equipment powered by electricity

116 Umeme Power: Transforming Uganda Patients in a ward at Gulu Regional Referral Hospital

ocated in Gulu Municipality, Bardege Umeme helps Division, about 6 km west of Gulu Town, the hospital and its health centres--Lacor Health Centre III - Amuru, Lacor Health Centre III - Opit Lacor cut Land Lacor Health Centre III – Pabo, serve patients from about ten districts. Given that Amuru and Gulu alone have power costs about 600,000 people, the hospital and its facilities easily serve an area with about a million people. The facility consists of a complex with a St. Mary’s Hospital Lacor is the 482-bed capacity and 3 Peripheral Health largest private non-profit referral Centres - each with 24 beds (Opit, Amuru and Pabo), a Nurse and Midwifery Training hospital in Gulu, Northern Uganda. School, a Laboratory Training School, School of Anaesthesia and Gulu University teaching site for its faculty of medicine.

Umeme Power: Transforming Uganda 117 Lacor is very critical in this region. Over two decades of civil war devastated the economy of the region leaving the population in dire need, suffering and despair A medical attendant gets blood from its storage facility at Moroto Regional Referral Hospital

The total bed capacity of the hospital complex including the three health centres is, therefore, 554. It offers general health care services ranging from curative, promotive, preventive and rehabilitative health care services including specialist services and is a training centre for different cadres of medical personnel. The selected specialised services provided include urology, orthopaedic, paediatric, plastic and fistula surgeries, treatment of childhood malignancies and detection and treatment of early cervical cancers and endoscopy. Most of these can only be executed with electricity. While the facility also relies on generators and solar power to run its operations saving people’s lives, the hospital relies mainly on electricity distributed by Umeme. Given the facility’s very high demand for electricity, it is connected to an 11kV line of Umeme. On average the hospital pays Umeme over Ush300million per annum. Electricity from Umeme also helps the facility cut costs of power because the cost per kWh of running a generator (fuels excluding service and spares) is currently about 3 times the cost of the grid (Umeme). Lacor is very critical in this region. Over two decades of civil war devastated the economy of the region leaving the population in dire need, suffering and despair. Most of the patients served are among the poorest of the poor, who live well below the poverty line. The hospital together with its health centres accommodate on average more than 500 inpatients plus their attendants and receive on average 600 outpatients on a daily basis. There are about 1,000 employees combined with their family members living within the hospital.

118 Umeme Power: Transforming Uganda A medical attendant operates a machine at Lira Regional Referral Hospital

Umeme Power: Transforming Uganda 119 arely do people think of the significance of steady power Umeme facilitates supply in medical research. But one of Umeme’s clients, the Uganda Virus Research medical research RInstitute (UVRI), located on the shores of Lake Victoria in Nakiwogo village, Entebbe Municipality knows just how in Uganda critical the power distributor’s steady power supply is. “Those machines never go off. Power never goes off here”, says

120 Umeme Power: Transforming Uganda Racheal Asiimwe, the Institute’s Head “We spend this less because Umeme We spend of Finance and Administration. In the is more reliable now,” she says. “Those this less background, intense vibration from days our generator expenses would go medical equipment that store samples to the highs of Ush20million and more. because can be heard. Some of the machines Sometimes we would lose some of Umeme have transparent glass where one can our samples because of unanticipated easily see different insects, mostly outages.” is more mosquitoes, test tubes filled with With reliable power supply by liquids and pieces of ice cubes. reliable Umeme, the Institute is moving now Asiimwe says the institute spends towards use of prepaid meters. The an average of Ush83million per month plan is to transition from the two on electricity. But, she says with meters that they have been using to a construction of more laboratories, single YAKA meter. which are nearly complete, they might With recent outbreaks of strange soon start spending about Ush85million diseases such as hemorrhagic fevers per month. of Ebola, Marburg, Rift Valley Fever In addition to this, she says and Crimean Congo, this facility, the they usually spend an average country’s center for identification of Ush15million per month on and classification of disease causing maintenance of the automatic backup pathogens but also a center for finding generators and fueling them in case of solutions into the country’s biggest an outage. health emergencies, is ever more important.

Umeme Power: Transforming Uganda 121 122 Umeme Power: Transforming Uganda Given its significance as a centre for critical research, Dr. Diana Atwiine, the Ministry of Health Permanent Secretary says the facility can not afford having a power outage for even a minute. She added that given its huge power consumption, the facility has been grappling with a huge utility bill that previous budgetary allocations could not cover. To cover these, in financial year 2018/19, the institute that has been receiving a budget of Ush1.6billion for the last two financial years, has had an additional funding of Ush4billion. Atwiine says the money is partly intended to enable the researchers get utilities such as power sustainably. Currently the Institute is doing trials in search of the HIV/AIDS vaccine and Dr. Lutwama Julius the Deputy Executive Director says most of their specimen has to be kept under the cold chain. Also recently, they have found new viruses – Sosuga virus, Bukakata virus and Mburo virus. However, that’s not all, the institute discovered Chikungunya virus, West Nile virus, Bwamba virus, Semliki Forest virus, O’nyong’nyong virus, and Kadam viruses too. The facility was established in 1936, as the Yellow Fever Research Institute by the Rockefeller Foundation. In 1947, scientists researching yellow fever placed a rhesus macaque in a cage in the Zika Forest. The monkey developed a fever, and researchers isolated from its serum a transmissible agent that was first described as Zika virus in 1952. No wonder when in 2016, South America suffered a severe outbreak of Zika, many scientists flew into the country to research more about the virus.

Umeme Power: Transforming Uganda 123 NWSC: Umeme critical to water production and supply

he days when Ugandans would experience incessant water cuts are gone. Many credit only National Water and Sewerage Corporation (NWSC), Uganda’s water and sewerage utility. But NWSC admits that power distributor Umeme shares in this credit. According to the water utility, electricity is an Timportant factor in the water abstraction, treatment and distribution process, which would not have been easy without reliable supply. “Umeme is an important partner in delivering water in our areas of operation. We also use a mix of solar and diesel but Umeme remains a key partner,” says the corporation’s Senior PR Manager Samuel Apedel.

124 Umeme Power: Transforming Uganda An aerial view of NWSC’s Gaba water treatment plant

The corporation uses about 14MW monthly, worth approximately Ush6billion. Of this, the NWSC water production plants at Ggaba use about 9MW of electricity. This is a lot of power, which cannot be replaced by standby capacity. For instance, in 2012 the load- shedding and power shortages, led the south western parts of Kampala like Lubowa, Seguku and Kajjansi supplied from Entebbe to suffer water shortage as less water was being produced. The production plants in Ggaba, which serve Kampala (Kampala, Mukono and Wakiso), are entirely dependant on Umeme. Apedel says power outages would be disastrous, as they would adversely affect production. He says Umeme responds swiftly whenever there is a problem and NWSC hopes for a continued prompt response and good partnership. Some areas that are on main lines are more likely not to suffer shortages like others on the hills where water has to be pumped. Other areas are not rationed due to infrastructure limitations.

Umeme Power: Transforming Uganda 125 Umeme’s service is impressive, NWSC-Kitgum

n average, National Water NWSC- Kitgum specifically uses “NWSC-Kitgum finds Umeme’s and Sewerage Corporation power for production purposes in services for the last three months since (NWSC)- Kitgum area their day to day operations of wells June 2018 to date very impressive consumes power worth 20 that are scattered in various locations compared to the previous durations,” million a month according (Pandwong, Lemo, Hilltop, PTC, KTI, Nambuya says. “With fair stability of Oto Nambuya Faith, the NWSC Area YY Okot and Mican stations) and power supply in place, NWSC has Manager. security lights at night as a prerequisite realized constant supply of water to her in the same locations. esteemed customers, easy payment of water bills, expansion of pipe network, and appreciation of services provided by both institutions among others hence business growth in the water sector in the area.” However, Nambuya notes that the situation before Umeme was not good. “Kitgum specifically commends Umeme services for the last three months and the institution urges her sister service provider to keep it up if both service providers are to realise their respective organizational missions and visions,” Nambuya said.

NWSC’s Loro water supply system

126 Umeme Power Power: Transforming Transforming Uganda Uganda For instance, since Yaka eliminated the human resource that used to come and check the metres, this eliminated Umeme empowering cost should be reflected in the cost of power, Otim says. Local governments like Kitgum local governments’ district rely on electricity to function. The Integrated Financial Management System, a critical financial system that efficiency both the central and local governments rely on, runs on electricity or some other form of power. "A generator that runs a three phase system is very expensive to buy and maintain," Otim ccording to Alex Otim, Otim says that Umeme is doing notes. "Also, it is expensive to buy solar the Chief Finance Officer, a better job. "Initially we had UEB, powers that can generate that kind of Kitgum District, the district which was faced with the challenges power. So Umeme remains the sole headquarters spends Ush1.5 that government utilities faced," Otim option." million and Kitgum General noted. "Services are much better now." Apart from making local government AGovernment Hospital, Ush15 million He adds that Umeme has helped per quota respectively. more efficient, Umeme has created customers with power saving tips but employment opportunities. "There are The hospital serves clients from needs to do more, invest in technology people who are self employed because Kitgum, Lamwo, Agago and Pader. that saves costs. they have access to power and have Another Hospital in the district also started businesses," Otim noted. spends Ush15million per quota. Umeme Power: Transforming Uganda 127 Umeme is biggest distributor of power to rural communities

ince 2015 when the Output Based Aid (OBA) project started, Umeme has connected over 102,000 households in peri-urban and rural areas. While there are other private companies, Umeme, which is the biggest of them all, is also responsible for the biggest percentage of the connections made under SOBA.

Contractors at work in Hoima

128 Umeme Power: Transforming Uganda Contractors erect a power line

The World Bank-funded project, supports provision of free grid connections for the poor households. Under the project, Umeme has been working hand-in-hand with the Rural Electrification Agency (REA) to extend power to ‘poor’ households throughout Uganda. The project was established to put an end to a trend where REA would extend national grid lines to rural settings but households would not connect. This would happen because the cost of connection—about US$200—would be too costly for many in rural settings. “To address this,” Godfrey Turyahikayo, the Executive Director, REA, says, “it was realised that a subsidy approach would be required. One that would offset the connection cost burden from the consumer and step up the low connection rates especially in the rural areas of Uganda.” The project will specifically target potential customers in two categories; those households within the low voltage network of a utility operator, who need a no-pole service and are able to pay

Umeme Power: Transforming Uganda 129 President Museveni commissions an electricity power line

for the energy consumed but have that are aimed at increasing access. not connected themselves for at These programmes include KFW least 18 months after commissioning Densification program; this program of the network. and those eligible is a counterpart funded project poor households identified in newly by Umeme and KfW through the electrified areas where poverty German government. It is budgeted mapping has been undertaken by an at €7million each for 3 years. The independent consultant. project is targeting customers within All these households are required a radius of 2km from the existing to do is just wire their houses and pay Umeme network. Eligible households their own energy bills. include places of worship, markets and trading centers whose average cost Beneficiaries say the project has per connection will not be more than transformed their lives in multiple US$1,200. The process of identifying ways. Apart from lighting homes, eligible customers commenced in beneficiaries say the project improved 2017. the education environment of their children, created income generating The Peri-urban program is an on- activities and generally improved their going World Bank funded project livelihoods. through the Ministry of Energy and Mineral Development. It focuses Apart from OBA, Umeme also on customers within a 5km radius participates in various programs in along the Kawanda-Masaka 132kV partnership with REA to execute Transmission line. 4,623 households government projects that are financed were connected in 2017. by various development partners and

130 Umeme Power: Transforming Uganda UmemeUmeme Power: Power TransformingTransforming UgandaUganda 131 132 Umeme Power: Transforming Uganda Creating meaningful impact through CSR investments

meme’s corporate social to staff for planting at their respective surgical operations of varying complexity, investment (CSR) is built on homes. free of charge. the principle that community Sanitation Drive in Kibuli investment should create a Sanitation is one of the social issues meaningful and sustainable impact. Health Camps in Bugisu Region that the urban poor are faced with and UIn 2013 for instance, Umeme partnered without addressing this, the community is Umeme in partnership with The Hinds with the Rotary Club of Uganda to Feet Project, a local NGO focused on vulnerable to diseases. Under the health raise funds for cancer screening and making health information accessible to and safety umbrella, Umeme collaborated construction of a new cancer ward at all through a vibrant volunteer program, with the local leadership in Kibuli (Mabikke Nsambya Hospital. organized two health camps in Mbale and zone) slum to renovate one of the public It also partnered with the Uganda Sironko Districts. This initiative offered lavatories that serves over eighty families. Blood Transfusion Services and conducted broad health services that included dental a blood donation drive in different parts care, antenatal care, eye care, general Hope Ward Initiative of the country. Umeme also supports the medical care, cancer awareness, laboratory Association of Surgeons of Uganda annual services, HIV testing and counselling, family Umeme partnered with the surgical camps across the country. planning nutrition, children care and minor International Hospital Kampala and surgeries. Over 2,500 people got free the International Medical Foundation medical attention at the camps. to collect funds to support lifesaving Environmental surgeries for new borns with defects conservation under the Hope Ward initiative. The Launch of the U-Green Tree Annual Surgical Camp – The Hope Ward Initiative handles Planting Initiative in 2016 saw Umeme Busoga region complex treatment and surgery for the opt to participate in greening the In partnership with the Association disadvantaged who cannot afford them. environment considering that one of Surgeons of Uganda (ASOU), of Umeme’s materials is poles. Umeme the Annual Surgical Camp in Busoga partnered with Uganda Timber Growers Sickle Cell Drive – Kabaka’s Sub region was held in August 2017. run Association (UTGA), an independent The camp attracted participation private sector association for commercial from Jinja Regional Referral Hospital and Umeme in partnership with Airtel timber growers in Uganda, to drive further other surrounding hospitals and Health Uganda and other companies took tree planting with our staff. Through the Centre 1Vs in the Region. The Association part in the Annual Buganda Kabaka’s “Think Green! Plant a Tree!” Campaign attended to over 5000 community run in a fundraising drive for sickle 1408 fruit tree seedlings were distributed members and performed at least 100 cell treatment. Sickle Cell, a blood

Umeme Power: Transforming Uganda 133 disorder disease, is not understood clearly and the run was meant to create this awareness including reassuring the affected community that a sickler can live a full life. USh110 million was collected towards the cause.

Employee Community Participation In Umeme's journey towards sustainability, 1 the company has engaged staff in community initiatives and the global issues that impact society. During the health camp initiatives in Mbale, employees participated voluntarily to give a smile to the less privileged. The power of teamwork and 2 collaboration has given the Umeme Brand a new face in Mbale. A caring Brand! In commemoration of the World Aids Day, employees reached out to underprivileged, HIV/AIDS single mothers supported by the Uganda Youth and Women Effort Fighting Aids (UYWEFA), a Community Based Organization in Kazo-Wakiso District. Through an internal fundraising drive, staff made financial donations for the purchase of food items that included Maize Flour, Rice, Cooking oil, Beans and Soya, which were handed over to the beneficiaries during the festive season. For the disadvantaged communities of Budadiri and Bugisu in Mbale, Umeme employees contributed clothes, shoes, beddings and these items were distributed to the beneficiaries during the Health camps that were held in May and August respectively.

Education Umeme participated in the NSSF Hash 7 Hills Run in a partnership between NSSF and KCCA to support the renovation of 3 public schools under KCCA.

134 Umeme Power: Transforming Uganda 4 7

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1. Umeme hands over a cheque of Shs2million as a contribution towards the run to celebrate the birthday of the Kabaka of Buganda in 2016. 2. Umeme staff attend to an expectant mother at an Umeme sponsored medical camp in Budadiri. 3. Umeme MD, Selestino Babungi, helps students at the Salama School of the Blind, Mukono to plant a tree. 4. An Umeme staff donates blood at a Kampala Service Centre during the blood donation drive in January 2018. 5. A tree planting session at the Mukono School of the Deaf. 6. Umeme staff during a city cleaning drive. 6 7,8. Umeme trains children about safety at a primary and nursery school in Kampala

Umeme Power: Transforming Uganda 135 atrick Makwetta, a resident of Mbale, has been an anti-power theft advocate in Fighting Mbale for the last two years. Before he actively got involved, power thefts were rampant, some even resulted into deaths. vandalism, PUmeme, he says, has been very active in ramping up efforts to put an end to this scourge. Umeme is now spot on, he says, people now power thefts know that stealing power is not only bad, it is dangerous. Makwetta says Umeme’s methodology, which and ensuring has included sensitizations, radio talk shows, engaging stakeholders, has worked. “Previously,” Makwetta says, “people felt they safety for all were entitled to free power. If a Umeme team went into their communities to disconnect those

136 Umeme Power: Transforming Uganda Umeme staff disconnect illegal connections in one of the Kampala surburbs who would have connected illegally, safe system operations, intensified they would threaten or even beat them school and community awareness up. Now people know that Umeme is Our commitment engagements and general public in charge.” to safety in awareness campaigns on multiple media Apart from Makwetta, Umeme channels including radio, television, has enlisted many other stakeholders our workplace, print and online digital channels. to assist in resolving company and for our people Umeme also ensures that staff are sector issues. Other stakeholders and the public, equipped with the necessary safety have included the security agencies, tools and protective gear to protect judicial system and local leaders. All across the them against harmful conditions arising these have been critical in the drive network remains out of their day to day operations. to reduce energy losses and vandalism On the network side, Umeme of the network infrastructure and by our number one ensures that all reported emergency extension, increasing safety for workers priority” conditions are responded to in time, and customers. lines are cleared of vegetation while To reinforce focus of internal and addressing dangerous network spots external safety, Umeme continues Umeme MD, Selestino Babungi through investments and maintenance to train staff and contractors on programmes.

Umeme Power: Transforming Uganda 137 Umeme's Head of Communications and Marketing, Sandor Lyle Walusimbi (L), chats with stakeholders at the Energy Week event in Kampala

Specifically, other approaches have in the Elgon sub region, has led to increased legal connections, reduced included; improvement in; fatalities, improved awareness of the dangers of illegal connections and increased economic activity due to Sensitisation a) Supply Reliability reliable power supply. In 2017, the Company implemented There was a marked improvement a customer outreach program to in supply reliability as a result of all the

sensitise the communities about the interventions above. Reliable supply b) Mindset Change dangers of power theft and illegal enabled continuous water supply Having opened channels of connections, which had led to loss by National Water and Sewerage communication with communities and of several lives in the Eastern region. Corporation, lighting for education, different levels of leaders, people began The pilot campaign targeted the Elgon operation of health facilities, increased taking safety seriously. Communities sub region, which comprises Mbale, working hours and general industrial invited Umeme outreach teams to Tororo, Bulambuli, Sironko,Manafwa, productivity. talk about safety and dangers of illegal connections, or called for action against Bududa, Kapchwora, Kumi, Pallisa and From this programme, Umeme those that were putting the lives of Budaka districts. is gaining community ownership and their household at risk. Activities of the operations included advocacy, political buy-in and support, sensitising the masses about the dangers of power thefts and illegal connections, the new connection As a result of all these interventions procedure, disconnecting illegal users fatal accidents related to network and arresting power thieves. interference and power theft have The successful outreach and community mobilisation approach reduced significantly over the years

138 Umeme Power: Transforming Uganda Umeme's Network Expansion (2005-2017) Umeme plans to invest US$1 billion to meet new power demands

meme plans to invest over US$1 billion into the power distribution network aimed at government’s desire to Government increase electricity penetration and requirements for increasing supply. This will be in addition to the US$600 million that by 2025 Uthe power distributor had spent by June 2018 from 2005 when it acquired the distribution concession. Umeme’s plans are a response to ever growing demands in the electricity sector. Government plans to increase power penetration from the current 23% to 40% of households by 2025 as generation capacity increases from the current 650MW to over 1,700MV by 2020. “Mobilisation and deployment of this capital shall be an important work stream for the company over the coming period,” said power penetration Selestino Babungi, the company Managing Director. “Continuous investment in the grid ensures its efficiency, reliability, safety and To increase from the ability to evacuate and distribute increased generation capacity.” current 23% of households to This will not only make the entire electricity sector financially stable, but also continue to drive Uganda’s economic development 40% and improvement of social services like education and health.

140 Umeme Power: Transforming Uganda Targets by 2020

generation capacity Increases from the current 650MW to over 1,700MV

Umeme Power: Transforming Uganda 141 142 Umeme Power: Transforming Uganda Umeme staff during the U-Green Tree Planting Campaign