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Umeme to invest $30m into network

By Vision Reporter

Added 1st April 2010 03:00 AM

UMEME, the electricity power distributor, has promised to invest $30m in a move aimed at rehabilitating and expanding the power distribution network.

UMEME, the electricity power distributor, has promised to invest $30m in a move aimed at rehabilitating and expanding the power distribution network.

By Ibrahim Kasiita

UMEME, the electricity power distributor, has promised to invest $30m in a move aimed at rehabilitating and expanding the power distribution network.

Charles Chapman, the managing director, told members of Parliament on the natural resources committee that the new investment will focus on customer care, service delivery, safety, billing and losses.

“We would like to invest even more but are aware that this will impact on the tariffs,” he told parliamentarians last week at the Imperial Resort Beach Hotel in Entebbe.

“This is over and above the $76.6m which we have already invested in Uganda,” Chapman said.

Umeme is wholly owned by Actis Infrastructure 2LP, a fund owned by the Commonwealth Development Corporation in the UK.

Chapman said Umeme had complied with the lease contract, valued at $82m and paid to the Uganda Electricity Distribution Company (UEDCL), the owner of the distribution network.

He said the firm had put in place a strategy to reduce commercial and technical losses in the system.

Implementation of the loss reduction strategy would involve inspecting premises, identifying illegal connections, meter tampering and taking remedial action, he added.

The natural resources committee, chaired by Winnie Masiko, wanted to understand the operations of Umeme more and also render their support when necessitated.

“There has been lack of information, therefore, we could not understand your operations,” she said.

“I have never received the concession agreements. We are confused because we don’t have information.”

Sam Zimbe, the Umeme general manager, explained that under the lease and assignment agreement, the process for verifying Umeme’s capital investment lay with the Electricity Regulatory Authority.

This was in the distribution system and computation of rate of return and in accordance with the tariff methodology set out in the supply licence.

“Umeme has a contractual obligation to invest capital of $65m within five years (2005-2010) from take over,” he pointed out.

“Todate, Umeme has invested around $80m, exceeding the investment target of $65m.”

Zimbe explained that Umeme’s direct operational and maintenance costs claimed in the tariff are fixed in real terms as per concessions.

Zimbe denied that Umeme had ever withdrawn funds from the escrow account.

Umeme to invest $30m into network

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