Umeme Will Invest Up to $100m Upgrading Uganda Network This Year

Umeme Ltd., the Ugandan power distributor owned by Investec Asset Management Ltd. and Actis LLP, may invest as much as $100 million in upgrading its network this year, Managing Director Selestino Babungi said.

Planned funding this year is part of the $440 million the company is spending between 2013 and 2018 overhauling old equipment, buying new technology and adding distribution points, Babungi said Thursday in an interview in the capital, Kampala. Last year, the company spent 269 billion shillings ($90.5 million), he said.

“As we invest, we are reducing energy losses, connecting more customers and expanding the network,” Babungi said.

Uganda, Africa’s biggest coffee exporter, has a peak power demand of 540 megawatts against a generation capacity of 670 megawatts. At least 15 percent of Uganda’s population has access to electricity and demand grows at an average of 10 percent annually, according to the state-run Electricity Regulatory Authority.

The nation may face a power deficit late next year, which may force it to rely on reserves of 100 megawatts of thermal power for additional generation, Babungi said.

Uganda is building the 600-megawatt Karuma and the 183-megawatt Isimba hydropower plants along the Nile River to forestall future deficits. The government says its two plants, being developed by Sinohydro Corp. and China International Water & Electric Corp. will start generation in 2018.

“Our growth strategy is to prepare for all this power coming on board by building new sub-stations,” Babungi said.

New Plants

Industrial consumers in the country including the domestic units of Coca-Cola Co., the world’s biggest beverage company, and Lafarge Cement SA of France. The government uses at least 70 percent of the East African nation’s power, according to Umeme.

The 250-megawatt Bujagali hydropower plant on the Nile River, in which Blackstone Group LP’s Sithe Global Power LLP has a stake, is the nation’s biggest electricity generator.

A Ugandan unit of Eskom Holdings SOC Ltd. operates the government’s 180-megawatt Nalubaale and 200-megawatt Kiira plants along the Nile, 80 kilometers east of Kampala.

Investec has an 18.47 percent interest in Umeme, Actis’ Umeme Holdings Ltd. has 14.3 percent, while the state pension National Social Security Fund owns 14.27 percent of the power distributor. Umeme has a concession to manage the nation’s power distribution network until 2025.

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