IFC helps provide electricity to Uganda

13 Jul 2009

WASHINGTON: IFC, a member of the World Bank Group, announced today, 13 July 2009 it plans to provide a US$25 million loan to Umeme to help the Ugandan electricity distribution company improve the quality of its service and connect up to 20,000 new customers annually in a country where many people still lack electricity.

IFC's loan aims to contribute to Umeme's US$50 million investment program for 2009 and 2010. As part of the program, Umeme will upgrade its existing equipment and provide new electricity connections. The company currently supplies power to over 300,000 customers.

“We are delighted with this funding, which will be used to make additional improvements for our business and domestic customers, supporting the government's energy policy,” said Charles Chapman, managing director of Umeme.

Umeme's investment program also aims to reduce technical and commercial losses of electricity. The company has invested resources in mapping the entire electricity distribution network for the region, which aims to enable the company to run the distribution business more efficiently.

“Electricity is the engine of investment and industrial growth and essential to the long-term health and wealth of the nation,” said Fred A. Kabagambe-Kaliisa, permanent secretary at Uganda's Ministry of Energy and Mineral Development. “Uganda's government is determined to see a drastic increase in electricity access both in urban and rural areas. The proposed investment by Umeme through this IFC facility will go a long way in meeting the government's goal of increasing electricity access.”

Umeme, which is wholly owned by the United Kingdom's CDC Group, operates the bulk of Uganda's distribution assets under a 20-year concession granted in 2005. As one of the few private sector power distribution companies operating in Africa, Umeme's success hopes to serve as a good example for other countries in the region and may encourage them to liberalise and privatise their own power sectors.

“Since beginning operations in 2005, Umeme has connected almost 100,000 new customers to electricity and significantly reduced distribution losses,” said Jean Philippe Prosper, IFC director for Eastern and Southern Africa. “Umeme's growth and commitment to quality service is helping provide electricity to more Ugandan's, improving their quality of life and supporting the country's sustainable economic growth.”