Kampala, Uganda: The Uganda Electricity Distribution Company Limited (UEDCL) has secured a USD 50 million (about Shs190 billion) financing facility from Absa Bank Uganda to strengthen and modernise the country’s electricity distribution network.
The five-year facility signed on Monday, December 15, 2025, at UEDCL Tower in Nakasero, will fund major network upgrades, reinforcements, smart grid initiatives, construction of new electricity substations and the integration of renewable energy generation.
UEDCL said the investment will improve electricity reliability, reduce technical losses, and help unlock suppressed demand across the distribution network by the close of 2026, in line with government targets on universal electricity access and industrial growth.
Lydia Ocheng-Obo, the Board Chairperson, described the deal as timely, noting that the distribution network requires substantial capital investment to meet growing demand.
She said the agreement demonstrates confidence in UEDCL and government-led reforms in the energy sector, while also setting a precedent for government agencies to access financing directly from the private sector.
Paul Mwesigwa, the Managing Director UEDCL, said the funding will play a critical role in supporting government’s industrialisation agenda, improving electricity reliability and enhancing affordability for consumers.
“This investment will enhance the reliability and efficiency of the electricity supply system, thereby cementing our role in supporting Uganda’s economic growth,” Mwesigwa said during the signing ceremony.
He said the loan was approved by the Electricity Regulatory Authority (ERA) and factored into the electricity tariff as part of efforts to make the distribution segment self-sustainable.
Mwesigwa added that the facility attracts an interest rate of 8 percent VAT inclusive, significantly lower than prevailing market rates of up to 28 percent VAT inclusive.
On behalf of Absa Bank, the institution’s Managing Director, David Wandera, said the bank remains committed to mobilising long-term capital to support infrastructure development and energy transformation across Africa.
“Reliable power distribution is fundamental to Uganda’s industrialisation, competitiveness and inclusive growth. This facility reflects Absa’s long-term commitment to financing infrastructure aligned to Uganda’s Vision 2040 and National Development Plan IV,” Wandera said.
Established in 2001 under the Electricity Act of 1999, UEDCL’s mandate is to own all electricity distribution networks below 33kV across the country. The company was granted a licence to sell and distribute electricity on December 31, 2024, following the expiry of Umeme’s 20-year concession.
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