Uganda’s Minister for Energy and Mineral Development, Ruth Nankabirwa, has called on the Uganda power companies to list on the local stock exchange as a strategy to secure sustainable financing for their operations. Citing the example of Kenya’s electricity generation company, KENGEN, Nankabirwa emphasized that listing on the stock market would provide power agencies with the financial stability needed to meet the growing demands of power generation, transmission, and supply across the country.
“We are considering allowing you to become companies that can borrow money and invest here. This is what we are discussing with the Minister of Finance, and the President has sent a team to Kenya to benchmark how KenGen is doing it.” Nankabirwa said. “As you know, KenGen is performing well, they are even paying back the government and sharing dividends. This is the kind of success I want to see Uganda’s generation companies achieve.”
Nankabirwa made these remarks during the recent signing of the Internal Performance Contracts (IPC) between Uganda Electricity Generation Company Limited (UEGCL) and the management of the Nalubaale-Kiira hydropower plants in Jinja. The IPCs are part of the government’s broader efforts to improve efficiency and accountability within the energy sector.
Nankabirwa highlighted KENGEN, the Kenya Electricity Generating Company, as a successful example of how listing on the stock exchange can benefit a power company. Since its initial public offering (IPO) on the Nairobi Securities Exchange (NSE) in 2006, KENGEN has raised significant capital to support its expansion into geothermal, hydro, and wind energy projects.
This ability to access public markets has allowed the company to diversify its energy sources and enhance operational efficiency. Established in 1954, KENGEN has become a major player in Kenya’s energy sector, boasting a 65% market share and an installed capacity of 1,904 MW, making it the largest energy producer in East Africa.
Nankabirwa believes that Uganda power companies can replicate KENGEN’s success by accessing the capital markets to raise funds for new projects and upgrade existing infrastructure. This would help them to meet the growing energy demands of Uganda’s industrial and domestic sectors.
As the government has prioritized boosting Uganda’s power production, foreign investment in the sector has surged. According to the Electricity Regulatory Authority (ERA), Uganda’s installed electricity capacity reached 1,402 megawatts (MW) as of December 2022, while demand stood at 843 MW, resulting in a surplus of 559 MW.
Uganda still faces one of the lowest electrification rates in Africa. This is largely due to an overreliance on biomass, inadequate electricity transmission and distribution infrastructure, limited access to off-grid solutions, underutilization of energy for productive purposes, and disjointed planning across sectors.
In urban areas, 57.2% of Ugandans have access to electricity, but this drops to just 10% in rural areas, with a national average of only 22.1%. As of December 2022, Uganda had approximately 3,385 kilometers of transmission lines, with plans to expand this network to 4,354 kilometers by 2025.
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