Prime
I have already prepared energy sector reforms - Nankabirwa
Government has been sending mixed signals that have unsettled concessionaires. PHOTO/ FILE
What you need to know:
- Minister Ruth Nankabirwa says the reforms seek to streamline the energy sector with the view of reducing the cost of electricity.
Energy Minister Ruth Nankabirwa has said she has completed a paper that will reform a number of Energy sector activities.
The paper, which she said has already been submitted to the Cabinet Secretariat and is awaiting presentation, creates several scenarios for sector reforms that will affect both future and current concessions or contracts.
READ: Who will take power to the powerless?
Government concessioned a number of companies to operate the energy sector in the electricity distribution and generation sub-sector.
A number of concessions including that of Umeme, which expires in 2025 and Eskom, which is due to expire next year, are being renegotiated while others government has indicated will not be renewed.
Government recently asked Eskom to wrap up operations in the management of Nalubaale and Kira power dams ahead of the expiry of its 20-year concession next year.
“As the line minister, I have finished preparing a paper on energy reforms. I have already submitted it to the Cabinet Secretariat. I am waiting for it to be cleared for presentation before Cabinet,” Ms Nankabirwa told Daily Monitor at the weekend without giving details.
Her paper comes at a time when a number of key activities including negotiation for renewal of Umeme’s concession are taking place, amid continued demand for reforms in the electricity sub-sector, which continues to be dampened by high tariffs.
President Museveni has previously blamed “middlemen” for government’s failure to bring down electricity tariffs.
Last week, Mr Museveni said he would ask Ms Nankabirwa to amend laws in the energy sector to enable government transmit electricity directly to consumers without involving third parties.
Asked what her paper means to the negotiations between Umeme and government, Ms Nankabirwa, without giving details, said Umeme, which distributes electricity to at least 98 percent of Ugandans on the national grid, has a concession that runs until 2025, thus when it expires it does not necessarily mean that it will be renewed automatically but will be reviewed after which a position will be taken.
“We shall go back to the drawing board and review the contract. My paper has several scenarios that can be taken,” she said.
Asked how negotiations were progressing, Mr Ramathan Ggoobi, the Secretary to Treasury and Ministry of Finance permanent secretary, which has representation on the negotiation committee, said the discussions were ongoing and no position has been taken.
Last week, while appearing before the Parliamentary Natural Resources Committee to defend the Electricity Amendment Bill 2021, Ms Evelyn Anite, the Investment and Privatisation State Minister, told MPs government had moved to create a national power utility company that will generate, transmit and distribute electricity across the country.
When asked how the move would affect Umeme, which is a private company involved in distribution, Ms Anite said Umeme was “doing the role of distribution and the President’s directive is that we should not have middlemen”.
“The major key areas of industrialisation where consumption is high has been divided between UEDCL and Umeme through concession,” she said, noting: “The concession we signed with Umeme has clauses of entry and exit, so if the spirit is that we are now having one national company ... then we will have to use the clause that provides for exit of concession between government and Umeme. If it is otherwise, we shall invoke the clause of continuity.”
Mixed signals
Government has in recent months sent mixed signals, unsettling concessionaires such as Umeme that have in the last 20 years been key players in the electricity sub-sector.
In January, Energy State Minister Sidronius Opolot Okasai, presented a supplementary request before the Parliamentary Natural Resources Committee, in which he said was part of an exit plan from the Umeme concession. However, the request was rejected because government had not presented a comprehensive perfromance report as requirered.
