Uganda Faces Potential Power Tariff Hikes Amidst Strained Distribution Network

Electricity tariffs in Uganda are likely to see an upward revision as the country grapples with a rapidly escalating demand that is outstripping the capacity of its distribution infrastructure. State Minister for Energy, Sidronius Okaasai Opolot, has alerted Parliament that this strain, combined with aging equipment, could necessitate tariff adjustments and potentially lead to load-shedding.

Minister Okaasai informed the Natural Resources Committee that the annual electricity demand growth, typically around 10%, has surged by over 20% in the past year. This accelerated demand is placing immense pressure on the existing network, with several substations operating beyond their designated capacity.

He highlighted that 12 substations are currently running at over 80% capacity, while the Mutundwe and Busunju substations are exceeding their rated limits. This overload, the minister explained, is prompting the Electricity Regulatory Authority (ERA) to consider tariff increases, a move that contrasts with the government’s aim for affordable power.

The minister also pointed to the challenge posed by aging equipment and the scarcity of suitable spare parts. Many components for the distribution network are imported, leading to prolonged outages when faults occur and repairs are needed. The situation is so critical that Okaasai warned of a possible return to load-shedding periods.

In response to these pressures, the government is considering prioritizing power supply to key areas, including national parks and Hoima, which is preparing to co-host the 2027 Africa Cup of Nations.

During the committee meeting, legislators also expressed concerns regarding the capacity of local companies awarded electricity distribution contracts by the Uganda Electricity Distribution Company Limited (UEDCL). The scrutiny on UEDCL’s decisions, especially following its takeover of the network previously managed by Umeme, underscores the need for improved reliability and efficient management of the power distribution system.

These developments raise significant concerns for both households and businesses, particularly manufacturers reliant on consistent power for their operations, as the nation navigates the challenges of expanding its energy infrastructure to meet growing demand. https://nilepost.co.ug/news/378618/power-tariffs-could-rise-as-demand-overwhelms-distribution-network