The utility company saw its net profit more than double to Shs48.2bn Kampala, Uganda | ISAAC KHISA | Lack of clarity on renewal of Umeme’s operating licence in 2025 is limiting its ability to raise more capital and make capital investments in the electricity distribution network.
The utility company, which more than doubled its net profit from Shs21.8bn to Shs48.2bn for the six months ending June 30, said the inability to raise capital is hindering its ability to achieve the national electrification goals.
“We await further engagements with the government for an amicable settlement of the negotiations,” said the company’s Chairman Patrick Bitature and CEO Selestin Babungi.
“We remain committed to driving Uganda’s electrification agenda through efficient and safe operation of the electricity distribution system.”
Umeme has been in deep negotiation with the government over renewal of its concession licence upon expiry of the current one in 2025. However, the government has been undecided, with President Yoweri Museveni accusing the electricity distributor of failing industrialisation due to high electricity tariffs.
“They went behind and then brought something called Umeme. What is this for? A private company, looking for profits, you make it a middleman between the generation of electricity and the final consumers, including the factories which you want to create jobs. What’s this, what are you looking for?” President Museveni said during this year’s Labour Day celebrations at State House Entebbe.
Museveni, instead, said industrial parks will be powered directly from generation and not through Umeme, a move that would deny the utility company billions of shillings in revenues.
Umeme has fully drawn down and utilised the debt raised in late 2019 to bolster its investment programme over the past 18 months; with its long-term gross debt at the close of June this year now standing at US$120.3m, down from US% 144.3milion in December 2020.
Revenues up by 9.3%
Umeme recorded a 9.3% increase in revenue to Shs 928bn citing increased electricity demand across all consumer categories following reduced restrictions after the first wave of coronavirus pandemic. These included industrial and commercial customers that each recorded a 13% increase in electricity demand and domestic customers that recorded a 5% increase in electricity demand.
Overall, the electricity sales for the six-month’s period increased by 11.8% from 1,538 GWh to 1,720 GWh for the same period in 2020.Similarly, the company’s operating costs increased by 12% to Shs 123 billion compared to the same period last year due to […]