Uganda’s State Power Company Mulls Raising $1 Billion in an IPO

Uganda Electricity Generation Co. said it plans to raise $1 billion by listing on the domestic stock exchange within the next three years to raise funds for investment in energy projects.

The state-owned utility plans to boost government funding of ongoing hydropower projects as well as embark on new ones to bridge growing demand for electricity in the country, Chairman Stephen Robert Isabalija said in a phone interview Thursday from Kampala, the capital.

Uganda Electricity owns the Nalubale and Kiira hydropower plants along the Nile River, which are managed by Eskom Holdings SOC Ltd. of South Africa. The two facilities have generation capacity of 200 megawatts and 180 megawatts each, according to UEGCL. The plan to list is a “strategic direction” the company has taken, though it has yet to determine details of the listing, he said.

Uganda is building new power plants to connect more of its citizens to the grid. Only about 15 percent of Uganda’s population have access to electricity, according to the World Bank. The country is developing the 600-megawatt Karuma hydropower facility, which is being built by Beijing-based Sinohydro Corp., and the 183-MW Isimba plant under construction by China International Water and Electric Corp. Both projects are along the Nile River.

The East African nation plans to develop the 600-megawatt Ayago hydropower plant also along the Nile, according to the Energy Ministry.

‘Big Potential’

“As an implementing agency for government, we are mobilizing for funds to support government in these big projects,” said Isabalija. “We also want to explore geothermal power as well since we have big potential.”

Electricity demand in Uganda, which has generation capacity of 852 megawatts, grows at an average 10 percent annually, according to the state-run Electricity Regulatory Authority. The 250-megawatt Bujagali hydropower plant on the Nile River, in which Blackstone Group LP’s New York-based Sithe Global Power LLP has a stake, is the nation’s biggest producer of electricity.

Large industrial electricity consumers in Uganda include the domestic units of Coca Cola Co., Lafarge Cement SA and China Machine Building International Corp., according to Kampala-based Umeme Ltd., the power distributor that has a concession running to 2025.

UEGCL plans to list “in stages” as money is required for different projects, though details have yet to be worked out, Isabalija said.

The Uganda Securities Exchange has 16 listed companies and has a total market capitalization of $9.4 billion, according to information e-mailed by the bourse today.

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