The Ministry of Energy and Mineral Development has commenced the implementation of the Power Sector Reforms, targeting to enhance sector performance and provide affordable power to the people of Uganda.

The move follows a Cabinet Directive in early October as a strategy to minimize expensive private capital in the Electricity Subsector investments in generation, transmission, and distribution.

Cabinet, among others, directed the Ministry not to renew the Concession and Privatization Agreements for Eskom Uganda Limited and UMEME Limited after their concessions come to their natural end in the year 2025

According to the principal communication officer at the ministry of Energy and Mineral Development Solomon Muyita explains the reforms will culminate in creating the Uganda National Electricity Company Limited as a state-run entity with majority shareholding under a Public Private Partnership arrangement as a possible option.

“The Ministry has already constituted a Joint Committee to handle the Eskom Concession and is in the process of making a similar arrangement for the UMEME concession” Mr Muyita explains

The respective Committees are tasked with the planning and management of the end of the concessions to ensure seamless handover of the operations of the assets.

“The minister of energy has also assured the companies that if there are any unsettled obligations on the side of Government they will be paid after the audit general conducts an audit to confirm the exact obligations” Mr Muyita explains further”

Power distribution company UMEME confirmed on Thursday that they will exit Uganda in 2025 after they received notice from government that their 20-year concession will not be renewed upon expiry.

“The concession is enshrined in several binding Concession Agreements. The Company has formally received written communication from the Government of the Republic of Uganda, notifying it that the current Concession will continue to run until its natural end in March, 2025 as stipulated in the Concession Agreements after which, there will be no renewal,” The power distributor said in the Thursday morning statement.

Umeme further noted that it remains committed to performing its obligations as per the existing Concession Agreements and will continue to operate and maintain the electricity distribution system in line with prudent utility practice to ensure continued service delivery through to the end of the concession.