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State-owned Uganda Electricity Distribution Company Limited (UEDCL) has reported a notable 10.5% increase in revenue, reaching Shs88.5 billion for the fiscal year ending in June 2023. This positive financial growth was revealed during the company’s Annual General Meeting held in Kampala on February 28.
Company executives attributed the revenue surge to enhanced operational efficiency and an uptick in customer connections witnessed during the review period. Despite these achievements, total expenses also experienced a significant rise of 21%, climbing from Shs60.9 billion in June 2022 to Shs73.7 billion in June 2023.
This increase in expenses was primarily driven by higher electricity purchase costs, elevated fuel prices, increased repair and maintenance expenses for the aging network, and additional administrative costs arising from legal proceedings related to wayleave payments.
However, amidst these financial challenges, UEDCL managed to maintain a positive Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of Shs14.8 billion for the fiscal year ending in June 2023, although this represented a 22.6% decrease from the previous year.
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Paul Mwesigwa, Managing Director of UEDCL, reiterated the company’s commitment to financial stability through rigorous revenue management and cost-control measures. He emphasized the importance of operational efficiency, excellence in customer service, and sustainability in business operations.
Mwesigwa highlighted UEDCL’s core responsibilities, including monitoring the UMEME electricity distribution concession, power distribution across nine service territories, and operation of its creosote plant for supplying treated wooden poles to the national electricity grid.
Despite these achievements, UEDCL faces numerous challenges, including limited funding for essential investments in the distribution network, extensive distances of distribution networks due to limited transmission coverage, and management of energy losses exceeding regulatory targets.
Furthermore, vandalism and non-payment of lease fees by Umeme Ltd for the use of UEDCL assets have further strained the company’s operations, resulting in a net deficit after tax of Shs2.18 billion for the fiscal year.
In addressing the challenge of energy losses, UEDCL has shown improvement over time, reducing losses from 25% in 2022 to 21% as of June 30, 2023. However, this figure still exceeds the approved target set by the Electricity Regulatory Authority.
Looking ahead, UEDCL is preparing to take over Umeme’s operations in early 2023, requiring significant investments of approximately US$70 million annually to upgrade the network. The company’s technical staff are already identifying areas for repair and maintenance to ensure a smooth transition.
Minister of Energy and Mineral Development, Ruth Nankabirwa, emphasized the government’s commitment to supporting UEDCL in its transition, recognizing the importance of sustainable power supply for economic development.
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