Umeme

Umeme
Public Utility: USE: UMEME
Industry Energy industry
Founded 2004 (2004)
Headquarters Rwenzori House, 1 Lumumba Avenue, Kampala, Uganda
Key people
 Patrick Bitature
Chairman[1]
Selestino Babungi
Chief Executive Officer[2]
Services Electricity
Revenue IncreaseAftertax: UGX:35.5 billion (US$9.5 million) (2017)[1]
Total assets UGX:2.349 trillion (US$628 million) (2017)[1]
Number of employees
 1,472 (2017)[1]
Website Homepage

Umeme Limited is the largest energy distributor in Uganda, distributing 97 percent of all electricity used in the country.[3] The shares of the stock of the company are listed on the Uganda Securities Exchange (USE) and are cross listed on the Nairobi Stock Exchange (NSE).[4] As of December 2017, the company's total assets were approximately UGX:2,349 trillion (US$628 million), with shareholder's equity of approximately UGX:617.7 billion (US$165 million).[1]

Location

The registered offices of the company are located at Rwenzori House, 1 Lumumba Avenue, in the central business district of Kampala, the capital and largest city of Uganda.[1] The geographical coordinates of the company headquarters are 00°19'00.0"N, 32°34'46.0"E (Latitude:0.316667; Longitude:32.579444).[5]

Formation

Umeme was formed in 2004[6] when the government of Uganda leased the Uganda Electricity Distribution Company Limited to a consortium belonging to Globeleq (56 percent), a subsidiary of the Commonwealth Development Corporation of the United Kingdom, and Eskom of South Africa (44 percent).[7] The transfer of assets did not take place until 1 March 2005.[8]

During 2006, the consortium formed by Globeleq and Eskom was restructured, with Globeleq becoming the sole owner of Umeme.[9]

On 15 October 2012, Umeme became a listed company on the Uganda Securities Exchange (USE). A total of 622,378,000 shares, representing approximately 38 percent of its issued share capital at the time, became listed on the Ugandan bourse in an initial public offering (IPO).[10] The shares of the company started trading on the USE on 30 November 2012.[11] Umeme shares were first cross-listed on the NSE on 14 December 2012, with active trading commencing on 31 July 2013.[4] The company expected to use the proceeds from the IPO, estimated at UGX:171 billion, to expand its power distribution network and payoff debt.[12][13]

Ownership

As of December 2017, the ten largest shareholders in the stock of the company were as illustrated in the table below:[1] As of December 2017, the company shares were held by institutional investors (72 percent) and retail investors (28 percent).[14]

Umeme Stock Ownership
RankName of OwnerPercentage Ownership
1National Social Security Fund
23.20
[1][15][16][17]
2Allan Gray
9.60
3Kimberlite Frontier Africa Master Fund
8.30
4Investec Asset Management Africa
4.40
5Utilico Emerging Markets Limited
4.30
6The Africa Emerging Markets Limited
3.90
7International Finance Corporation
2.80
8Coronation Global Opportunities Fund
2.60
9Imara S P Reid Private Limited
2.50
10Duet Fund
2.50
11Others through USE and NSE
36.00
Total
100.00

Governance

Umeme is governed by a ten-person board of directors, who included the following people, as of 17 May 2018.[18][19]

  1. Patrick Bitature: Chairman
  2. Selestino Babungi: Chief Executive Officer
  3. Gerald Ssendaula: Member
  4. Pieter Adriaan Falling: Member
  5. Florence Nakimbugwe Nsubuga: Executive Director
  6. Andrew Buglass: Member
  7. Anthony Marsh: Member
  8. Florence Namatta Mawejje: Member
  9. Riccardo Ridolfi: Non Executive Director[20]
  10. Stephen Emasu: Member[20]

Management structure

Umeme is structured into twelve management departments, each headed by a senior manager. The senior managers form the Executive Committee, whose members were the following as of 1 June 2018:[21]

Umeme Senior Management Structure
DepartmentName of ManagerTitle of Officer
Office of the Managing DirectorSelestino BabungiManaging Director
Operations ManagementFlorence NsubugaChief Operations Officer[22]
Technical OfficeSimbiso ChimbinaChief Technical Officer
Corporate DevelopmentBlessing NshahoChief Corporate and Regulatory Officer
General ManagerAlmero GreyActing General Manager Capital and Contracts Division
FinanceMarie Nassiwa MartinChief Financial Officer
Information SystemsRoger BentleyChief Information Officer
Internal AuditRuth Doreen MutebeHead of Internal Audit
CommunicationsSandor Lyle WalusimbiHead of Communications and Marketing
Customer ServiceAgnes Nalwanga Head of Customer Service
Supply ChainPatrice Namisano

Head of Supply Chain

Under the Executive Committee, Umeme has 25 other managers who assist the executives to implement company policy and run the company on a daily basis. In March 2015, Selestino Babungi was appointed managing director, replacing Charles Chapman who served in that role from February 2009 until March 2015.[23]

Unreliability of service

A graph showing frequent power outages in the Kibuli area of Kampala during the month of April 2016.

Within Uganda, Umeme is known for chronic unreliability and has been accused of corruption.[24] Customers frequently face extended service outages,[25][26] which are occasionally followed by protests, riots, and assaults on Umeme employees.

Protests and rioting

In 2010, protests erupted after a two-week power blackout in the town of Bugembe. Attempts to disperse the protesters led to violent clashes between police and irate residents. Nine were arrested, with eight being charged with inciting violence, staging an unlawful and violent assembly, and insulting the police.[27]

In 2011, a two-month power outage led to protests in Jinja. Residents and business owners built barricades, set tires ablaze, and blocked traffic. Police responded with tear gas and live ammunition.[28] Days later, over 100 people were dispersed by riot police using tear gas and rubber bullets after marching on Umeme's offices in protest of recurring outages in Masaka town.[29]

In 2012, after a month-long outage along the Kampala–Gayaza Road, stone-throwing protesters caused property damage and injuries.[30]

In 2014, a Umeme manager in Mubende was beaten severely by an infuriated mob during power-related protests at the Kasambya trading centre. The ensuing battle between rioters and security forces resulted in 15 arrests and one other injury, including a trader who was shot twice.[31] Later that year, Kampala print and publishing shop owners went on strike, blocked Nasser road, and burnt paper and plastic to protest six-day power cuts along the road. Security forces used tear gas to disperse the protesters.[32]

Recommendations by parliament

In 2013, a probe committee of Uganda's Parliament recommended cancellation of Umeme's contract due to its chronic failure to provide reliable services, which would trigger a contract severance payment of at least US $148 million.[33]

The following year, Uganda's Parliament recommended that Umeme's "contract should be terminated” due to the gross manipulations encountered in the procurement of the Umeme concession, and the scandalous provisions of the power distribution agreements signed between the government of Uganda and Umeme.[34] Ultimately, this course of action was decided against because it would have been too expensive and politically complicated.[35]

Power losses

In June 2016, Umeme estimated its total power losses across its network at 19.1 percent.[36] In September 2016, Umeme estimated that it lost UGX:106 billion annually from nonpayment of bills, vandalism, and illegal connections.[36] Fifty-one percent of its losses come from the Bugisu sub-region in the Eastern Region.[36]

In June 2015, Umeme estimated its power losses at 19.2 percent. Of that, 13 percent was attributable to technical losses (resulting from poor network configuration) and 6.2 percent was from commercial losses (such as power theft and under-billing). Umeme plans to reduce total power loss to 15 percent by 2018.[37]

History

In May 2010, Umeme's communications director Charlotte Kemigyisha wrote a commentary in the Daily Monitor newspaper urging public support for President Yoweri Museveni's proposal to make electricity theft a capital offense.[38]

In December 2010, Umeme announced plans to invest US$32 million during 2011 in new substations, improvements in grid connectivity, and the introduction of pre-payment systems.[39]

In November 2013, Umeme announced that it had secured loans totaling US$190 million from the International Finance Corporation, Standard Chartered Bank, and Stanbic Bank to fund grid expansion and reduce energy losses.[40]

Umeme is spending US$440 million between 2013 and 2018 to overhaul equipment, buy technology, and add distribution points.[41]

In March 2016, the Daily Monitor newspaper reported that Umeme had signed a contract with the Uganda Electricity Transmission Company Limited to distribute the power generated from the Isimba Hydroelectric Power Station, due online in 2018, and the Karuma Hydroelectric Power Station, due online in 2020.[42]

In September 2016, a senior Umeme executive said that the company planned to spend US$2 billion over the next five years to expand the grid and increase access rates from an estimated 20 percent in 2016 (about 900,000 subscribers) to 40 percent in 2020 (about 3 million subscribers).[43] In December 2017, Umeme announced plans to invest US$155 million in 2018, to improve the distribution network, build new substations and refurbish old networks across Uganda.[44] In May 2018, in an interview with Reuters, Celestino Babungi, the CEO of Umeme, announced that the company planned to raise US$1.2 billion to revamp and expand the national distribution grid over the next seven years. A consultant was hired to advise and guide on how to raise the funds.[45]

Customer base

As of January 2016, Umeme's customer base was about 790,000, with approximately 16,000 customers being added every month. The company expects its customer base to exceed 1 million by the end of 2016.[46]

As at 30 June 2017, Umeme exceeded 1,000,000 paying customers, with the numbers growing at a rate of 13 percent annually.[47][48]

Accordng to the Daily Monitor, as of April 2018, Umeme had 1,125,291 customers.[49] Seventy percent of those customers were on the pre-paid metering system, known as "Yaka".[50]

By July 2018, pre-paid metering covered an estimated 80 percent of all Umeme's customers.[51] At that time, the customer mix was as illustrated in the table below:[51]

Umeme Customer Profile As At July 2018
RankCustomer Type% ConsumptionCost per kWh (USD)
1Industrial Customers
65
0.10
2Commercial Customers
12
0.18
3Domestic Customers
23
0.20
Total
100.00

See also

References

  1. 1 2 3 4 5 6 7 8 Umeme (26 March 2018). "Umeme Annual Report for the Year Ended 31 December 2017" (PDF). Kampala: Umeme Limited (Umeme). Retrieved 1 June 2018.
  2. ↑ Ismail Musa Ladu (16 March 2015). "Umeme gets new chief executive officer". Daily Monitor. Kampala. Retrieved 1 June 2018.
  3. ↑ Wesonga, Nelson (28 March 2016). "Poor power network worries electricity company". Daily Monitor. Kampala. Retrieved 28 March 2016.
  4. 1 2 Mugwe, David (1 August 2013). "Umeme makes first trade at NSE, electronic share transfer goes live". The EastAfrican. Retrieved 6 May 2014.
  5. ↑ Google (1 June 2018). "Location of the Registered Offices of Umeme Limited, Renzori House, Lumumba Avenue, Kampala, Uganda" (Map). Google Maps. Google. Retrieved 1 June 2018.
  6. ↑ Actis Capital (2011). "About Umeme Limited". London: Actis Capital. Archived from the original on 5 February 2012. Retrieved 1 June 2018.
  7. ↑ Busharizi, Paul. "UEDCL sold, $65m injection seen by 2010". New Vision. Kampala. Retrieved 16 February 2016.
  8. ↑ Mare, Paul (16 August 2007). "An insight into Umeme concession and work". New Vision. Kampala. Retrieved 16 February 2016.
  9. ↑ Kasita, Ibrahim (22 February 2007). "Umeme owner Globeleq up for grabs". New Vision. Kampala. Retrieved 16 February 2016.
  10. ↑ Ilungole, Stephen (12 October 2012). "Regulators finally approve UMEME IPO". New Vision. Kampala. Retrieved 16 March 2015.
  11. ↑ Sanya, Samuel (21 October 2012). "UMEME shares selling fast". New Vision. Kampala. Retrieved 6 May 2014.
  12. ↑ Ilungole, Stephen (16 October 2012). "Umeme IPO: 46% shares bought". New Vision. Kampala. Retrieved 17 February 2016.
  13. ↑ Busuulwa, Bernard (27 October 2012). "Umeme looks to clear debt with IPO money". The EastAfrican. Nairobi. Retrieved 1 October 2016.
  14. ↑ Busuulwa, Bernard (27 December 2017). "Fears over concession affect Umeme's price". The EastAfrican. Nairobi. Retrieved 27 December 2017.
  15. ↑ Mark Keith Muhumuza (9 November 2016). "Uganda: Umeme Acquisition - What More Shares Mean for NSSF". Daily Monitor via AllAfrica.com. Kampala. Retrieved 10 November 2016.
  16. ↑ Biryabarema, Elias (16 November 2016). "UK private equity firm Actis sells out of Ugandan utility Umeme". Reuters.com. Retrieved 16 November 2016.
  17. ↑ Mwaniki, Charles (16 November 2016). "Umeme resumes trading shares on Nairobi, Kampala bourses". Business Daily Africa. Nairobi. Retrieved 16 November 2016.
  18. ↑ Umeme (17 April 2018). "Umeme Limited: Board of Directors". Kampala: Umeme Limited. Retrieved 17 April 2018.
  19. ↑ URN (17 May 2018). "Umeme shareholders reject Bigirimana over 'tainted, corrupt image'". The Observer (Uganda) Quoting Uganda Radio Network (URN). Kampala. Retrieved 18 May 2018.
  20. 1 2 "Umeme deputy MD Sam Zimbe to retire". Daily Monitor. Kampala. 17 April 2018. Retrieved 17 April 2018.
  21. ↑ Umeme (1 June 2018). "Umeme Limited Senior Management Team". Kampala: Umeme Limited. Retrieved 1 June 2018.
  22. ↑ Ladu, Ismail Musa (13 February 2012). "Umeme to realign operations with two new appointments". Daily Monitor. Kampala. Retrieved 6 May 2014.
  23. ↑ Vision Reporter (20 May 2009). "Electricity utility boss resigns". New Vision. Kampala. Retrieved 17 February 2016.
  24. ↑ Nelson Wesonga, and Isaac Imaka (11 December 2013). "Kadaga orders Umeme bribery claims probe". Daily Monitor. Kampala. Retrieved 17 February 2016.
  25. ↑ Busuulwa, Bernard (21 October 2015). "Power cuts: No respite for Umeme's large users". The East African. Nairobi. Retrieved 17 February 2016.
  26. ↑ World Bank (2014). "Power outages in firms in a typical month (number)". Washington, D. C.: World Bank. Retrieved 17 February 2016.
  27. ↑ Gulumaire, Andrew (19 November 2010). "8 Ugandans remanded over Jinja Umeme riot". Daily Monitor. Kampala. Retrieved 17 February 2016.
  28. ↑ Biryabarema, Elias (2 December 2016). "Uganda power cuts provoke riots, threaten economy". Reuters.com. Retrieved 17 February 2016.
  29. ↑ Kitatta Kaaya, Sadab (4 December 2011). "Police take over Umeme offices". The Observer (Uganda). Kampala. Retrieved 17 February 2016.
  30. ↑ Administrator (17 January 2012). "Umeme Riots Rock Kampala, Wakiso". Kampala: Chipreports.com. Retrieved 17 February 2016.
  31. ↑ Kagiri, Luke (26 April 2014). "Umeme boss beaten by mob in Mubende". New Vision. Kampala. Retrieved 13 February 2016.
  32. ↑ Kafeero, Stephen (18 September 2014). "Nasser Road traders riot after 6 days power outage". Daily Monitor. Kampala. Retrieved 17 February 2016.
  33. ↑ Abdallah, Halima. "Uganda faces high bill to end Umeme deal". The East African. Nairobi. Retrieved 17 February 2016.
  34. ↑ "Terminate Umeme and Eskom Contracts". Uganda: parliament.go.ug. 27 March 2014. Retrieved 3 May 2016.
  35. ↑ "Why Umeme contract will not be terminated". Uganda: Observer. 8 April 2014. Retrieved 3 May 2016.
  36. 1 2 3 Adengo, Jonathan (21 September 2016). "Uganda: Power Theft Loss Rises to Shs100 Billion". The Monitor. Kampala. Retrieved 24 January 2017 – via AllAfrica.
  37. ↑ Anyanzwa, James (12 December 2015). "East Africa electricity firms in bid to reduce power losses". The EastAfrican. Nairobi. Retrieved 4 June 2016.
  38. ↑ Kemigyisha, Charlotte (May 2010). "Make electricity vandalism a capital offence". Daily Monitor. Kampala. Retrieved 13 February 2016.
  39. ↑ Ojambo, Fred (30 November 2010). "Umeme Uganda to Invest $32 Million in Power Substations in 2011". Bloomberg News. Retrieved 6 May 2014.
  40. ↑ Reuters (13 November 2013). "Ugandan power firm Umeme gets $190 million for grid expansion". Thomson Reuters. Retrieved 17 February 2016.
  41. ↑ Ojambo, Fred (9 April 2015). "Umeme Will Invest Up to $100m Upgrading Uganda Network This Year". Bloomberg News. Retrieved 17 February 2016.
  42. ↑ Muhumuza, Mark Keith (23 March 2016). "Umeme to distribute Karuma, Isimba power". Daily Monitor. Kampala. Retrieved 23 March 2016.
  43. ↑ Obulutsa, George (22 September 2016). "Uganda to spend $2 billion on power connections, grid". The EastAfrican Quoting Reuters. Retrieved 22 September 2016.
  44. ↑ The Independent (27 December 2017). "Uganda: Umeme to Invest US$155 Million in 2018". The Independent via AllAfrica.com. Kampala. Retrieved 27 December 2017.
  45. ↑ Biryabarema, Elias (16 May 2018). "Uganda power distributor Umeme to spend $1.2 bln to expand grid". Johannesburg: Reuters Africa. Retrieved 31 July 2018.
  46. ↑ Wakabi, Michael (9 January 2016). "Umeme customer base to hit 1 million in 2016". The EastAfrican. Nairobi. Retrieved 12 January 2016.
  47. ↑ The Eagle Reporter (8 December 2017). "Umeme customers now scale the one million mark". Eagle.co.ug (The Eagle). Retrieved 10 January 2018.
  48. ↑ Rupiny, David (11 May 2017). "Umeme Customers Hit One Million Mark". Kampala: Uganda Radio Network. Retrieved 16 March 2018.
  49. ↑ Wesonga, Nelson (8 April 2018). "Umeme to recover Shs104 billion from domestic customers". Daily Monitor. Kampala. Retrieved 17 April 2018.
  50. ↑ The Uganda Independent (22 November 2017). "Umeme investment in power distribution infrastructure paying off". The Independent (Uganda). Kampala. Retrieved 17 April 2018.
  51. 1 2 Wakabi, Michael (12 July 2018). "Uganda's electricity sector at a critical crossroads". Daily Monitor. Kampala. Retrieved 12 July 2018.

Coordinates: 00°19′00″N 32°34′46″E / 0.31667°N 32.57944°E / 0.31667; 32.57944

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