Upgrading an ailing power distribution network
Umeme is the principal power distribution company in Uganda. Formerly state-owned, Umeme’s network covers a significant proportion of Uganda and includes 230,000 poles and 17,000 km of overhead cable.
Umeme has played an important role in increasing access to electricity - 88,000 new customers have been connected by Umeme since its creation, while over 30 rural electrification schemes have been connected to the Umeme grid.
At the time of CDC’s investment in 2005, Umeme’s network was in a state of disrepair as a result of historic underinvestment. The challenge and scale of turning the business around was considerable and this was recognised from the outset. Consequently, over the last 4 years Umeme’s capital expenditure programme of US$60m has focused on upgrading and improving key areas of the business.
The refurbishment and strengthening of the network has been central to CDC’s primary commitment to make the network safer. Falling power lines, caused by decades of underinvestment, have been the cause of serious accidents, often fatal. Power lines come down for a variety of reasons, the most common of which are that existing poles have decayed causing the network to collapse or old cables fall during the rainy season.
In addition to the investments in replacing and upgrading old power poles and cables, Umeme has undertaken an extensive safety outreach programme to educate the Ugandan public. Safety awareness information has been communicated extensively to rural populations through radio bulletins, leaflets, community talks and newspaper articles.
A far reaching schools education programme, featuring electrical safety talks and advice, has also been implemented. In 2008, Umeme staff and specialised safety experts visited 2,333 schools throughout Uganda as part of this programme. Umeme’s public safety awareness raising campaign is continuing in 2009.
Upgrading and maintaining the network and its infrastructure is a continuous process. A further US$100m is earmarked to be invested in network restoration over the next four years.
In economic terms, over 1000 new jobs have been created through contracts with several experienced local Ugandan engineering firms to carry out the refurbishment works on Umeme’s power distribution network.
Ugandan electricity consumers have benefited from investment in both the construction of new substations and refurbishment of existing substations. Improved customer billing systems and a readily available call centre have also been introduced.
Umeme’s positive climate change actions include:
Sourcing much of the electricity distributed by Umeme comes from hydropower. This is a much cleaner source of power than other alternatives, such as oil or coal.
The World Bank report “Catalysing carbon investment for a low carbon economy – World Bank progress on renewable energy and energy efficiency 2007” lists Umeme as one of their energy efficiency projects.
2005 - present
100% owned by CDC
Actis, Infrastructure 2
New Power Distribution
1 Data for turnover, EBITDA and taxes is from 2007.