Page 12 - EPSI Magazine Issue 8 final 2018.indd

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EPSI: Tell us about the successes of UMEME
in the last few years.
All studies show that UMEME is one of the best
utilities in Africa. If you look at the Energy Policy of
2002, they will show you the baseline of the statis-
tics of the sector; effective generation of 60MW of
power, less than a quarter a million customers, a lot
of supply unreliability, low industrial base, high inef-
ficiency. The sector was not financially and commer-
cially viable in that it was highly dependent on the
National Treasury and thereby the national budget to
subsidise it. So, they went for the reforms looking for
more importantly some private sector participation
in transforming the Energy Sector.
First of all, the network that was inherited was
run down. It has been a lot of work for restoration
of the network and expansion of the network. As
we speak the network has more than doubled from
around 17,000km and now it is around 33,000km;
from 10,000 distribution transformers and now we
are talking about 12,000 distribution transformers;
moving the customer base from 290,000 people to
1,300,000 people, it is true we have added one mil-
lion consumers in just over a decade.
The amount of power that is being passed
through the system has increased from 1,000GW
(Gigawatt) hours in 2005 to now 3,000GW (Giga-
watt) hours as of this year 2018. To pump that power
there has been a lot of investment done in the sec-
tor. UMEME alone has added in the sector 600 million
USD. But then again when you look upstream, we
have more than 20 independent power producers
that have come to compliment the government gen-
eration capacity in solar, mini hydros, Bujagali and
companies like Electromaxx.
Also, yes, we are not at the top of it, but reliability
has greatly improved. The quality of supply has great-
ly improved. For me when you look at a cash flow
perspective, whereas we were getting subsidies from
government from before 2005, then we were col-
lecting 160 billion Uganda Shillings, now the sector
contributes 1.8 trillion Shillings which is equivalent
to 10% of the national tax revenues. That is massive.
There are minimal subsidies coming through
just for thermal plants and capacity purposes. So,
when we sit back and look at the sector it has great-
ly transformed from where it was to where it is
now. And I can say it is not a one man’s show, it
has been a concerted effort for all sector play-
ers; the Regulator, Ministry of Finance, Planning
and Economic Development, Ministry of Ener-
gy and Mineral Development, our shareholders,
our financiers taking the risk to put their capital
into the business.
The second success I would highlight is
around people and capacity. When we inherit-
ed, we were struggling to find engineers. I can
assure you, we were struggling to find commer-
cial people. I remember for every role you are
doing here, you’d have a counterpart from Es-
kom or Europe to mentor you. Mention all the
jobs, finance, technical; there was a manpower
gap in the whole country.
This gap was not by choice. It was a result of
the Telecommunications Industry and its boom.
In the late 90’s and early 2000’s, all the bright
young electrical engineers crossed to the Tele-
communications Industry. Energy was ignored.
But the good thing is that when the national
Telecom sector matured, we are seeing a lot of
talent coming back. As we speak we have more
than 100 engineers in the organisation. Other
than the Chief Technical Officer (CTO) and Net-
works Asset Manager, everyone is a Ugandan in
that area. The commercial side of the business, I
can tell you that we do not have any expatriate
in that area. That capacity has been built and
greatly improved Uganda’s position in this busi-
ness. Actually, we are now exporting talent to
Rwanda, Malawi, Cameroon.
The other success we see is on system ener-
gy losses. Any utilities in the world has challeng-
es where your product is lost; for electricity we
call it energy losses. For example, National Wa-
ter, what they call non-metered water or non-
billed water revenues or water lost is at 31%. In
many years, they’ve moved only one percent.
For UMEME it was a major target over the last
years. We have moved from excess of 35% to
16.6% in energy losses as we speak. I remember
we were talking of 28% some time and people
wondered if we would ever reach 28%.