“We are poised to go back to the market to raise substantial amounts of money to invest in the infrastructure. We want to do things for the long haul in a sustainable manner,” said Patrick Bitature, the board chair of Umeme.
With government undertaking the construction of the Karuma and Isimba dams which are expected to add over 700 megawatts (MW) of electricity to the national grid, power distributor Umeme is seeking more money to invest into the power network to accommodate the increased input when it eventually comes on board.
"We are poised to go back to the market to raise substantial amounts of money to invest in the infrastructure. We want to do things for the long haul in a sustainable manner," said Patrick Bitature, the board chair of Umeme.
Speaking after the Umeme's annual general meeting on Tuesday in Kampala, Bitature explained that they will undertake this drive over a longer period of time so that more people can still afford to be on the grid.
"We need about $1.5bn to ramp up the last mile connection to see that it goes to as many homes as possible and be able to build an infrastructure that will last the next 30 to 40 years. We need a longer tenure (to raise the money) so that it does not impact negatively on the tariff," he said.
"Today our tariffs are higher but that is because of the cost of production. When we have more power, the power price should come down."
Umeme made its debut on the Uganda Securities Exchange (USE) on in November 2012. The firm's Initial Public Offer (IPO) was a success, and it picked up several nods, including being voted the best IPO in Africa in 2012 in the Europe, Middle East and Africa (EMEA) Finance awards.
"We have gone to the market before to raise money as Umeme. We wanted to bring down technical losses because we inherited a dilapidated network. We have about 10,000 transformers on our network. When we ramp up to 1500 megawatts, we need to make substantial investments in substations, transformers, wires, vehicles," explained Bitature.
"By listing the company, we have raised the standards of the company. It has made it easier to attract foreign investment to the company."
Selestino Babungi, the company's managing director said growth and expansion of the distribution network will be fundamental in the next five years.
"We are seeing a lot of investment in generation. We have an ambition as a country to move connection rates from an average of 16% to 30% of customers on that grid. That calls for expansion of infrastructure, be it at generation, transmission and distribution," he said.