Re-negotiations to enable power utility UMEME to operate in the country beyond 2025, when its current concession expires, are expected to take place this month but now the Africa Institute for Energy Governance (AFIEGO),a civil society organisation (CSO) has urged President Yoweri Museveni to stop the negotiations, citing corruption.
“The above is unacceptable especially when it is considered that in March 2018, the president wrote to the Minister of Energy and the IGG complaining about the cheating of customers through inflated power losses, mysterious investments and an unfair concession that guarantees UMEME a high return on investment,” says AFIEGO.
According to Dickens Kamugisha, the CEO of AFIEGO, the above result in high power tariffs which have a number of impacts such as denying businesses an opportunity to expand, denying youth job opportunities, failing hospitals to access power, increasing the burden on women who have to search for firewood to cook their families’ meals and others.
“To address corruption, you, in a March 12, 2018 letter to the Minister of Energy and Mineral Development (MEMD), directed the IGG to investigate the inflation of power losses by UMEME and the connivance of some Ministry of Energy officials who guaranteed UMEME a Return on Investment (ROI) of 20% . You also questioned the mysterious or unverified investments of US$500 million by UMEME that had failed to bring down electricity tariffs. 7. In your letter, you noted that the above and other factors were contributing towards the high power tariff,” says Kamugisha says in a letter dated January 17, 2019.
Nearly a year after the president ordered the IGG to carry out investigations on UMEME, the IGG is yet to issue a report of her investigations, he says.
Through the attached open letter therefore, AFIEGO is calling on the president to stop the renegotiation of UMEME’s concession until the IGG has issued her report and an independent audit into UMEME to determine the company’s reported added value to the country has been carried out.
Currently, government is implementing a number of key energy policies and projects including the ‘Free’ Electricity Connections Policy (2018-2027) under which three million new connections are planned by 2027. The above, for which US$212 million was borrowed, is part of Uganda’s Rural Electrification programme. Government is also building Karuma, Isimba and other dams to add 1,000MW to the grid. In addition, investments in the transmission and distribution segments are being made. Other energy projects such as the oil refinery, the crude oil pipeline to Tanga-Tanzania, solar projects, new mineral policies to among other things improve the artisanal mining sub-sector and others are also being implemented.