As Umeme’s 20-year concession nears its end, managing director, Selestine Babungi has disclosed that the company’s key priority areas now are continued investment in distribution systems, maintenance of infrastructure, retail services, technical capacity development, grid expansion, and efficiency enhancements.

Babungi was speaking during the release of the company’s last year performance which indicated a significant decrease in its net profit from sh148 billion in 2022 to just sh12 billion in 2023

“Our results mirror our commitment to delivering value across all fronts, to our customers, the government, shareholders, and stakeholders at large,” Babungi noted.

Highlighting the year’s achievements, he explained that a 9.6% growth in electricity demand, reaching 4,219 GWh, spurred by a 10.9% increase in customer grid connections, enhanced supply reliability, reduced energy losses, and overall demand.

The drop is mainly attributed to the alignment with International Financial Reporting Standards (IFRS) on the repayment of fixed assets as the company approaches the end of its 20-year concession set for March 2025.

The company recorded a 16.4% rise in revenue, reaching sh2.2 trillion in 2023, lifted by a 9.6% growth in electricity demand, a 5% hike in the average tariff approved by the industry regulator and increased income from electricity distribution construction services

The cost of sales ascended by 15.5% to sh1.45 trillion, propelled by an 8.8% increase in the volume of electricity purchased and a 4.4% rise in the bulk supply price.

The cost related to construction services escalated to sh122 billion, up from sh89 billion the previous year.

Sales across various customer categories witnessed healthy gains, with domestic households, commercial, medium industrial, and large industrial segments seeing increases between 8.8% and 11.7%.

The company connected 191,874 new customers to the grid, marking a 58% growth and expanding its customer base to 1.95 million, with support from government partnerships and subsidies aimed at reducing last-mile connection costs.

Looking ahead, Babungi underscored the company’s focus on expanding and reinforcing the distribution network to match the growing demand and grid connections.

“Over the last 19 years, we have rebased Uganda’s electricity sector into an operationally efficient and commercially viable industry, attracting both private and public investments to meet the country’s electricity needs. We believe the government and other sector players shall build on this foundation to further propel the country in achieving its national electrification goals outlined in the Third National Development Plan,” he added.