Uganda to take back control of electricity sector

Uganda's government said Friday it would take back control of electricity generation and distribution after refusing to renew contracts with international players who have been blamed for high tariffs.

The government plans to establish a new state-run entity, the Uganda National Electricity Company Limited, to manage power generation and distribution after the 20-year contracts with South African firm Eskom and the multinational Umeme consortium expire in 2023 and 2025 respectively.

The ministry of energy "has commenced the implementation of the power sector reforms, targeting to enhance sector performance and provide affordable power to the people of Uganda," it said in a statement.

"The reforms are expected to minimise expensive private capital in the electricity subsector investments in generation, transmission and distribution," the ministry added.

The "cabinet... directed the ministry not to renew the concessions and privatisation agreements for Eskom and Umeme Limited after their concessions come to their natural end", it added.

The announcement follows comments by President Yoweri Museveni in recent years slamming the two companies for the high cost of electricity and accusing them of conniving with government officials to defraud the country.

Eskom has been operating the country's two main hydropower plants near the source of the Nile since 2003 while Umeme has been in charge of the Uganda Electricity Distribution Company Ltd since 2005.

The Uganda Electricity Board was previously split into separate entities to handle generation, commercial distribution and transmission, with the government maintaining control over the management and operation of transmission.

According to the Uganda Bureau of Statistics, 57 percent of Ugandans have access to electricity from the national grid, but the power supply is often erratic.

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