Power distribution company in Uganda privatised
A joint venture between South Africa’s Eskom and the UK’s CDC is to take over operation of Uganda Electricity Distribution Company Limited (UEDCL) in a deal expected to fetch the government more than $361.4 million. The Umeme joint venture will pay Uganda a $1.4 million transaction fee upon transfer of control and an annual rental fee of $18 million for UEDCL’s assets for the 20-year period of the concession.
Under the terms of the deal, Umeme is obliged to invest a minimum of $65 million in the distribution system over the next five years and to make a minimum of 20,000 connections yearly over the same period. After 2010 25,000 new connections must be made annually. Currently only around 5% of the population has access to electricity but the country is still facing power shortages as a result of drought affecting hydro generation.