By Mark Kawalya
Ugandans looking to connect their homes to the electricity grid have reason to smile.
A new government program has been launched that seeks to subsidize new electricity connections. The initiative, called the Hybrid Electricity Customer Financing Framework, was launched by Ruth Nankabirwa, the Minister of Energy and Mineral Development, on December 13, 2022.
The program is in response to complaints from the public about high electricity connection fees that have kept many Ugandans in the dark despite their homes being in close proximity to the electricity grid network.
The program is running under a partnership between Umeme, the Ugandan government, the Electricity Regulatory Authority, the Uganda Development Bank (UDB) and the Global Energy Alliance for People and Planet (GEAPP). The Hybrid Financing Scheme will bring down the cost of new electricity connections for clients who do not need to buy a pole for their connection.
“This framework is sustainable given that it combines resources, from the consumers, the government and the private sector, relieving the entire burden off the shoulders of the government.” Ruth Nankabirwa said.
As of December 14th, 2022, there has been a reduction in the No-Pole electricity connection cost from UGX720,883 to UGX470,000. Applicants can pay the amount upfront or make a minimum deposit of UGX200,000 and access a credit of UGX270,000 from UDB’s financing scheme.
The credit facility from UDB is offered at zero interest and is gradually recovered from the client at a minimum of 15% that is deducted from every yaka (electricity) purchase they make over an 8-year period. However, clients have the option to seeking an early repayment plan.
Umeme welcomed the new financing mechanism that is aimed at boosting the government’s efforts to accelerate grid connections at an affordable cost.
Clients who want to access the service can submit an application using the Umeme App, go to www.umeme.co.ug/MyUmemeOnline or visit any Umeme Service Center.
Umeme entered the Uganda market in 2005 as a result of a government concession with the company, which resulted in the Uganda Electricity Distribution Company leasing out its assets. The concession will expire in 2025.