Uganda’s Umeme to Commit $1.2 Billion to Grid Expansion

Ugandan power distributor, Umeme Limited, says it will spend $1.2bn in the next seven years to revamp and expand the grid and has hired an adviser to explore options for raising the money, the company’s chief executive said on Wednesday.

The investments will be used to prepare for an expected rise in power expected to come online by 2020, CEO Selestino Babungi told Reuters in an interview.

The East African country is developing two new hydropower plants on the Nile – Karuma and Isimba – and when completed, they are expected to add a combined 780 megawatts (MW) of power to the grid.

When the two China-financed and constructed plants come online, they will roughly double the country’s existing generation capacity which currently stands at about 700MW.

“We need to invest in new infrastructure to uptake the new generation: extending lines, building new substations, connecting more customers,” Babungi said.

Uganda’s energy market is largely seen as underexploited and holding significant potential for growth.

The grid reaches just 23 percent of the country’s 40 million people and power consumption, according Umeme, stands at 85 kilowatt hours per capita annually.

That’s below the average per capita consumption rate of 150 kilowatt hours for sub-Saharan Africa, excluding South Africa, according to a 2015 report by consultancy McKinsey.