The Ugandan government has allocated Shs370 billion ($100.9 million) to the Uganda Electricity Distribution Company Limited (UEDCL) to upgrade the national power grid.

This investment aims to enhance electricity reliability, reduce energy losses, and support the country’s growing energy demands.

The funding, announced in April 2025, confirms Uganda’s commitment to improving its energy sector.

According to the Minister of Energy and Mineral Development, Hon. Ruth Nankabirwa, UEDCL, as a state-owned entity, is better positioned to invest in the distribution network, reduce power losses, and enhance the overall quality of electricity supply.

The allocated funding will drive the expansion of electricity access in under-served rural areas.

“The money will enable UEDCL to upgrade the power distribution network in the country over a period of 9 months”, said Eng. Ziria Tibalwa Waako, CEO of the Electricity Regulatory Authority (ERA).

Reliable electricity is essential for Uganda’s manufacturing and agricultural sectors, which contribute significantly to GDP.

“This initial capital for UEDCL is seed money from the Ugandan Government and not a loan”.

“UEDCL is expected to reduce energy loss factors to 14.5% in 2025, then to 13.65% in 2026, and 12.31% by 2027”, Waako added.

This will be a 16% improvement from when Umeme handed over distribution assets to the Uganda Electricity Distribution Company Limited (UEDCL).

After the successful handover, Uganda’s Electricity Regulatory Authority (ERA) has announced revised electricity tariffs for UEDCL.

Most Ugandans expect two primary outcomes from this government-led move: more affordable electricity tariffs and a more stable power supply.

A month before Umeme’s exit, Uganda intended to compensate the country’s largest utility power by borrowing $190 million (N306.5 billion) from Stanbic Bank to manage the grid after Umeme’s concession ends.

Experts in the sector view this intervention as timely, especially given the government’s ambitions to industrialize and diversify the economy.

The power sector is seen as a foundational pillar for achieving Uganda’s Vision 2040, which aims at transforming Uganda from a predominantly peasant and low-income country to a competitive upper-middle-income country.

Uganda’s power distribution network has long struggled with outdated infrastructure, high energy losses, and inadequate maintenance are factors that affect power delivery.

UEDCL is overseeing electricity distribution assets and managing operations, notably following the exit of UMEME, the country’s former main power distributor.

The Shs370 billion ($100.9 million) investment will finance the replacement of outdated transformers, installation of smart grid systems, and rehabilitation of distribution lines.

“We have kicked off by purchasing 200 new transformers to replace faulty ones, and have re-erected over 300 structures that were left incapacitated after Umeme’s exit”, said Protaze Tibyakinura, the UEDCL Chief Engineer and Technical Services Officer.