The government is set to lower electricity tariffs by approximately 10% as Uganda Electricity Distribution Company Ltd (UEDCL) takes over power distribution from Umeme Ltd on April 1, 2025.
This transition marks the end of Umeme’s 20-year concession and is part of a broader strategy to cut operational costs and make electricity more affordable for consumers.
Engineer Ziria Tibalwa Waako, CEO of the Electricity Regulatory Authority (ERA), highlighted that government-backed financing could significantly reduce capital costs.
“Government-led financing ensures lower capital costs, which directly translates to lower tariffs for end users. If concessional funding is secured, we expect electricity prices to decrease by about 10%. However, if UEDCL relies on commercial borrowing, these gains may be diminished,” she explained.
The Ministry of Finance has committed to ensuring a seamless transition by securing funding for UEDCL and settling Umeme’s outstanding investments.
The Office of the Auditor General is currently assessing the buyout amount, which will be honored under the Lease and Assignment Agreement.
Waako assured stakeholders that the transition would not lead to job losses, pointing to past industry shifts where over 98% of staff were retained.
“We anticipate a smooth handover that prioritizes workforce stability and service continuity,” she noted.
With Uganda’s electricity tariffs among the highest in the region, reducing dependence on costly private capital is expected to ease financial pressure on consumers while boosting economic growth.
As the April 2025 deadline approaches, stakeholders remain optimistic that this policy shift will enhance affordability and sustainability in the country’s energy sector.
