Eskom, Umeme exit gives Gov’t an opportunity to drive the power sector forward

Eskom Uganda Ltd finally handed over the operations and maintenance of the 380MW Nalubaale and Kiira Power Stations to the Uganda Electricity Generation Company Limited(UEGCL) a government agency.

Eskom Uganda has successfully operated and maintained the power stations under a 20-year concession that will come to its natural end on March 31st, 2023. Next in line to exit will be Umeme limited whose terms of operation will end in 2025.

I wish to thank Eskom Uganda Ltd under Thozama Gangi, for her efforts and for giving the government an account of the power company’s operations for the past 20 years and for her great contribution to Uganda’s energy sector over the years.

I also express my sincere appreciation to Eskom Uganda for successfully operating and maintaining these power stations for the past 20 years as well as contributing to Uganda’s energy sector development.
The energy sector is a critical enabler of Uganda’s socio-economic development as the government takes over UEGCL management and should commit to providing a good environment for private-sector investment and growth.

Eskom has registered key milestone achievements and stakeholder partnerships that government has to ride on to deliver better in terms of real-time and efficient service to consumers. In fact, the private sector is eagerly waiting for better results in terms of efficiency, transparency, good management and operation of these power stations. We, therefore, look forward to a smooth and seamless agency going forward.

Eskom invested USD52m in the complex, with Nalubaale taking the bulk (65%) of it due to its age at 68 years. In the 20 years of operation, Eskom has met the target of plant availability at 96.6% on average continued investment and maintenance of the government assets to ensure that they continue to provide reliable and affordable electricity to the people of Uganda which is in line with our purpose of making electricity safely available for supply at all times from all our power generating plants.

According to a detailed plant assessment by Hatch Limited, a Canadian Engineering firm it was established that the remaining life of Nalubaale had been greatly improved to 60 years for the dam compared to 34 years in the baseline report.

The powerhouse civil structure was assessed to have 30 years of remaining life, compared to 4 years in the baseline report.

Nalubaale major equipment was given a remaining useful life of 10-40 years whereas zero years had been assessed in the baseline report.

The National Budget Framework Paper with proposals of a Shs49. 98 trillion budget for Financial Year 2023/2024 has been passed by Parliament. The passing of the Budget Framework Paper is in line with the requirement of the Public Finance Management Act that sets 01 February as deadline for Parliament to approve it.

Defence, energy and transport sectors always take lion’s share of our budget allocation in an attempt to steer economic recovery through additional investments in ongoing infrastructure projects.

The works and transport sector was allocated Ush5.1 trillion ($1.4 billion) for integrated transport infrastructure investments with a provision of Ush400 billion ($113 million) meant for road maintenance works in an arrangement intended to benefit current road construction projects in the Albertine region as the country ramps up preparations for commercial oil production anticipated to commence in 2023.

The huge allocations made to the transport sector are meant to speed up the construction of the road network in the Albertine region and facilitate the initial production of Uganda’s first oil by international oil companies. A combination of increased expenditure on these projects and early investments done by the oil companies will indirectly expand economic activity and boost the economy in the short term.

The energy sector was allocated Ush1.1 trillion ($310.9 million) for infrastructure development, with Ush622 billion ($175.8 million) provided for the expansion of rural electrification programmes. This budget allocation seemingly promises sweet opportunities for energy industry contractors and modest financial relief for Umeme Ltd, which is owed more than Ush200 billion ($56.5 million) in unpaid bills incurred on subsidised power connections done in rural areas since 2018.

With that said, I wish once again to thank the latter for the investment and contribution to the energy sector however as we transition it’s high time government took the power sector very seriously to ensure that there is sustainable power generation and distribution in future.

It is the government’s mandate to ensure that these infrastructures are fully functioning to speed up the social and economic development of the county. We can no longer depend on and rely on outsiders to develop our economy.

Secondly, the energy sector is on the top government’s priority list. Each year the energy sector receives lots of budget allocation to drive the social-economic transformation journey. With Nalubaale and Kiira now in hands of the government we should look forward to seeing value for money in power investment in real terms. No room for corruption and bureaucracies but real business

The Writer Felix Oketcho is Managing Director Elix Promotions Ltd
foketcho@gmail.com