Eye on Uganda’s energy future as Umeme concession ends

The energy sector in Uganda is undergoing significant transformation as the 20-year concession for Umeme Limited, a privately listed electricity distribution company, has officially come to an end. This development marks a pivotal moment for Uganda's energy future, with plans in motion for key projects such as the East Africa Crude Oil pipeline and the construction of an oil refinery in Hoi Ma district. CNBC Africa spoke with Carol Nampurira, Corporate Sales Manager, Energy and Infrastructure, Global Markets, Stanbic Bank Uganda, to delve deeper into these developments and their implications for the market. One of the major milestones in Uganda's energy landscape is the securing of funding amounting to a billion US dollars for the East Africa Crude Oil pipeline. This pipeline is set to transport crude oil from Kabale to Hoi Ma, extending all the way to Tano, and will have the capacity to carry 246,000 barrels of crude oil per day upon completion. The progress of the project stands at around 50% completion by the end of 2024, with significant job creation and investment in local goods and services in both Uganda and Tanzania. The establishment of the oil refinery in Hoi Ma district further enhances Uganda's position as an oil-producing country. The joint venture partnership between the Ugandan government and Alpha MBM Investment, with an implementation agreement worth $4 billion, sets the stage for the construction of the refinery within a three-year timeframe. This strategic move not only creates employment opportunities for Ugandans but also enables the country to export refined oil products, fostering economic growth. The successful progression of these projects underscores the commitment and resilience of the Ugandan government and its key partners in advancing the oil and gas sector. In a separate development, Umeme Limited, a prominent player in Uganda's energy industry, saw the conclusion of its electricity distribution concession on March 31, 2025. The company handed over its assets to the government-owned Uganda Electricity Distribution Company, which assumed operations on April 1. Umeme's listing on both the Uganda Securities Exchange and the Nairobi Securities Exchange has been temporarily suspended to facilitate the transition process and maintain market transparency. While the end of Umeme's concession was a foreseen event, the suspension aims to address concerns related to price-sensitive information and mitigate any potential market disruptions. Looking ahead, the newly appointed entity, UEDCL, is expected to continue driving electricity reforms, providing reliable power services, and making strategic investments in Uganda's energy sector to sustain growth and development. With these significant changes unfolding in Uganda's energy landscape, stakeholders are poised to navigate a new era of opportunities and challenges, shaping the country's energy future in the years to come.