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Electricity is the invisible architecture upon which modern societies are built.
It powers industry, sustains healthcare systems, enables education, fuels technological advancement, and underwrites national competitiveness. For Uganda, aspiring toward industrialization, accelerated urbanization, and deeper regional integration, reliable, affordable, and sustainable electricity is no longer optional, it is strategic, foundational, and existential.
Yet, despite its centrality to national development, Uganda’s electricity sector has, for more than two decades, been defined less by cohesion than by contention. Public dissatisfaction has persisted. Institutions have traded accusations.
Operators have blamed regulators; regulators have faulted operators; policymakers have distanced themselves from outcomes. Since the early 2000s, the sector has been locked in an enduring blame game, one that has generated more noise than solutions.
But a critical question must now be asked: If blame were effective, would Uganda’s electricity sector still be struggling to align performance with public expectation?
Learning from the past: The UEB legacy
To understand the present, one must begin with the Uganda Electricity Board (UEB), the vertically integrated, state-owned monopoly that once controlled generation, transmission, and distribution.
By the late 1990s, UEB had become emblematic of deeper governance failures: political interference, financial insolvency, operational inefficiencies, corruption, and infrastructure decay. Technical and commercial losses were excessive. Power outages were frequent. Investment lagged behind population growth and rising demand.
These were not isolated shortcomings. They were systemic, cumulative, and deeply embedded. The electricity framework, as then constituted, could no longer sustain Uganda’s developmental ambitions.
Reform, unbundling, and the turn to private capital
In response, the government initiated comprehensive sector reforms in 2001. UEB was unbundled into three entities:
- UEGCL for generation,
- UETCL for transmission, and
- UEDCL for distribution.
The reform agenda sought efficiency, transparency, competition, and private investment. However, distribution, the consumer-facing end of the value chain, remained acutely weak. Infrastructure was dilapidated, losses were high, access was limited, and innovation was minimal.
Recognizing these constraints, Government adopted a public-private partnership model. In 2005, a 20-year electricity distribution concession was awarded to Umeme Limited, with UEDCL retaining ownership of assets and a mandate to monitor concession compliance, manage certain off-grid networks, and oversee specified grid-expansion projects. The concession formally expired on 31 March 2025.
The Umeme era: performance, progress, and persistent tensions
When Umeme assumed control, it inherited a fragile system: losses stood at approximately 38%, customer connections were below 300,000, and network reliability was poor.
Over the two decades, Umeme delivered demonstrable operational gains. Energy losses were reduced to 16.2% by 2023. Customer connections expanded to 1.6 million. Revenue collection reached 99%, reflecting improved operational discipline and community engagement.
Environmental performance also improved. Investments were made in flood-prone substation upgrades, underground cabling, and environmental risk mitigation. Compliance with IFC environmental standards, largely driven by financing requirements, strengthened environmental impact assessments, emissions monitoring, and stakeholder confidence.
Hydropower, clean and renewable, accounted for over 90% of energy use, reducing reliance on diesel generation.
Socially, electrification reached industrial zones such as Wakiso and Namanve, health centres, and underserved communities. Initiatives like the 2.0 Utility Program improved access to energy services and clean cooking, with disproportionate benefits for women.
Yet, for all these achievements, the concession ended in controversy. Tensions between profit maximization and universal service obligations intensified.
Disputes with the regulator ERA emerged over tariffs, capital recovery, and investment returns. Governance, while robust in compliance terms, was often perceived as commercially driven rather than anchored in genuine sustainability stewardship. Two years before the concession’s end, there was no shared, credible transition strategy.
The post-concession moment: institutions in contest
Following Umeme’s exit, UEDCL assumed distribution responsibilities amid significant operational strain. While it rapidly expanded connections, reaching approximately 2.4 million, it inherited an overstretched network characterized by overloaded transformers and substations. Despite initial investments exceeding Shs 251 billion, system breakdowns and inefficiencies persisted.
What followed was a familiar script. UEDCL accused ERA of regulatory inertia, alleging failures in inspection, network diagnosis, and oversight during the concession’s final years. ERA, in turn, faulted UEDCL for inefficiency, questionable staff absorption practices, and the utilization of the Shs 10 billion annually received during the Umeme concession for asset management, funds ERA argues should have supported network rehabilitation.
What is often overlooked, however, is this: UEDCL was not a bystander in the concession era. It had a formal mandate to monitor Umeme’s adherence to concession terms. It was part of the governance architecture. Responsibility, therefore, is shared.
Beyond blame: Why ESG is no longer optional
The enduring lesson from Uganda’s electricity journey is clear: sectoral failure cannot be reduced to a single actor, era, or contract. These challenges are historical, structural, and fundamentally governance-driven.
This is precisely where Environmental, Social, and Governance (ESG) principles become indispensable.
ESG reframes electricity not merely as a commercial service, but as a public good with developmental, social, and environmental consequences. It demands transparency in decision-making, accountability across institutions, and innovation that is locally adapted rather than mechanically replicated from foreign models.
Crucially, ESG compels the private sector to behave with public-sector consciousness, and the public sector to lead by example.
Yet, findings indicate that Uganda’s public institutions are often perceived as operating contrary to ESG principles, plagued by weak accountability, opacity, and politicization. If Government is to demand ESG compliance from private operators, it must first embed it within its own governance culture.
What ESG leadership must look like
For Uganda’s electricity sector to stabilize and thrive, ESG must be institutionalized, not rhetorically embraced.
This requires:
- ESG-aligned work plans across all departments,
- Clear performance targets, with at least 80% of staff meeting ESG benchmarks,
- ESG risk identification and mitigation embedded in core business functions,
- A comprehensive UEDCL ESG Strategy that integrates sustainability into operations, culture, and long-term planning,
- Regular community consultations, safety audits, and skills development,
- Investment in solar-integrated mini-grids for underserved regions, in partnership with NGOs and development financiers,
- Continuous benchmarking against international best practices and peer learning across Africa.
Only then can UEDCL, and the sector as a whole, credibly claim ESG leadership.
Conclusion: powering the future responsibly
Uganda’s electricity story is neither one of outright failure nor unqualified success. It is a story of reform, experimentation, progress, misalignment, and unresolved tension between public interest and commercial logic.
The way forward is not found in finger-pointing. It lies in ESG-driven governance, contextual innovation, and long-term accountability. Electricity must be governed not just efficiently, but ethically; not just profitably, but sustainably.
Only by embracing ESG as a governing philosophy, rather than a compliance checklist, can Uganda build an electricity sector that truly powers its people, its economy, and its future.
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