Uganda to List Power Companies to Ensure More Capital

August 10, 2024

(3 Minutes Read)

According to Minister for Energy and Mineral Development Ruth Nankabirwa, the listing would help the companies access sustainable financing for their capital-intensive projects. Uganda has more than 40 power generators, a single transmission company called the Uganda Electricity Transmission Company (UETCL), and nine distributors.

Uganda is considering listing power companies to enable them access to more capital, seeking to emulate the success of listed Kenyan power generation company KENGEN.

Umeme Ltd, the main distributor in the country, is currently listed on the Uganda Securities Exchange and cross-listed on the Nairobi Securities Exchange (NSE).

According to Nankabirwa, the energy ministry is in talks with the finance ministry about the possible listings on the USE and has already sent a team to benchmark with KENGEN. KENGEN, which was separated from KPLC during sector reforms in the late 1990s, was listed on the NSE through an IPO in 2006. It has an installed generation capacity of 1, 904MW, 86% of which is from renewable sources.

In Uganda, power generation companies include publicly owned entities, private entities, and public-private partnerships. In 2021, the publicly-owned Uganda Electricity Generation Company Ltd (UEGCL), which generates more than two-thirds of the country’s power, disclosed plans to list on the USE within two years.

The Ugandan government is also a major shareholder in the Bujagali hydropower plant, which is set to be restructured in a deal that will see TotalEnergies own 28.3% of the company in an ongoing acquisition.

Umeme has been pivotal to the growth of power distribution networks and customer numbers, from just 200, 000 in 2005 to two million today. It has invested USD 832 million in its distribution network and operations and was listed on both bourses in 2012. It is one of the most traded counters on the USE, and the likelihood of its delisting, once the concession expires, has the bourse in a bind.

Uganda plans to compensate the company’s private shareholders for unrecovered capital investments, plus a five percent premium, once the concession ends. Unrecovered capital investments stood at USD 339 million by the end of December 2023, and the figure is projected to fall to USD225-283 million by March 2025.