UGANDAN POWER DISTRIBUTOR UMEME SEEKING FUNDS TO INVEST ON NETWORK

With the Uganda government undertaking the construction of the Karuma and Isimba dams which are expected to add more than 700 megawatts (MW) of electricity to the national grid, the country's power distributor, Umeme, is seeking to raise funds to invest in its power network to accommodate the increased input when it eventually comes on board.

"We are poised to go back to the market to raise substantial amounts of money to invest in the infrastructure. We want to do things for the long haul in a sustainable manner," says Umeme Chairman Patrick Bitature.

Speaking after the publicly-traded company's annual general meeting here Tuesday, he added that Umeme would undertake the fund-raising drive over a longer period so that more people could afford to be on the grid.

"We need about 1.5 billion US dollars to ramp up the last-ile connections to see that it goes to as many homes as possible and be able to build an infrastructure that will last the next 30 to 40 years. We need a longer tenure (for repayment) so that it does not impact negatively on the tariff," he said.

"Today, our tariffs are high but that is because of the cost of production. When we have more power, the power price should come down."

Umeme made its debut on the Uganda Securities Exchange (USE) in November 2012. The firm's Initial Public Offer (IPO) was a success, and it picked up several awards, including being voted the best IPO in Africa in 2012 in the Europe, Middle East and Africa (EMEA) Finance awards.

"We have gone to the market before to raise money as Umeme. We wanted to bring down technical losses because we inherited a dilapidated network. We have about 10,000 transformers on our network. When we ramp up to 1,500 megawatts, we need to make substantial investments in substations, transformers, wires, vehicles," explained Bitature.

"By listing the company, we have raised the standards of the company. It has made it easier to attract foreign investment to the company."

Selestino Babungi, the company's managing director said growth and expansion of the distribution network would be fundamental in the next five years.

"We are seeing a lot of investment in generation. We have an ambition as a country to move Connection rates from an average of 16 per cent to 30 per cent of customers on that grid. That calls for expansion of infrastructure, be it at generation, transmission and distribution," he said

Source: Nam News Network