Ugandan company wants to invest in Ghana’s power sector

UMEME Limited, a power distribution company based in Kampala, Uganda wants to invest in Ghana’s power distribution sector to improve efficiency.

“We are certainly interested in investing in Ghana’s power distribution sector. Our investor, Actis, is a long term investment company, and with Ghana’s stable democracy and thriving business landscape, Actis is certainly interested in investing millions of dollars to improve power distribution in Ghana”.

Actis and other investors have so far spent $440 million in the Ugandan power distribution sector and intend to spend more in future.

The Managing Director of Umeme Limited, Mr Charles Chapman, told the Daily Graphic in an interview in Kampala that,  “Ghana has a stable democratic environment and we are looking forward to investing for 20-30 years or more,” he noted.

Benefits

If  Umeme gets the nod to participate in a private partnership with the Electricity Company of Ghana (ECG), Mr Chapman said, Umeme would concentrate on reducing commercial losses, improve on customer service delivery and install more pre-paid metres.

He said Umeme Limited would focus on improving customer service by sending bills via sms and email.

Mr Chapman said Umeme would pay power generators on time, ensure members of staff and management members were paid based on their performance, guarantee its networks are secured and reliable to supply power to consumers, as well as get a competitive tariff distribution.

“We will re-organise, incentivise and put a structure in place to reward staff and customers,” Mr Chapman assured.

Asked if Umeme Limited had any timeline within which it intended to invest in Ghana, Mr Chapman said, “We are ready when Ghana is ready”.

He, however, noted that, “If it is a management contract, it won’t work but it would work out if Umeme Limited would be required to make capital investment".

Achievements of Umeme

Highlighting some of the strides made by Umeme Limited in Uganda, Mr Chapman stated that his company began operations in Uganda in 2005, which at the time was recording 40 per cent losses. 

According to him ,both commercial and technical losses now stood at 20 per cent.

He said the company had projected to reduce both commercial and technical losses in Uganda to 14 per cent by 2017.

“One of the greatest achievements of Umeme Limited is we offloaded shares and gave Ugandans and other African nationals the opportunity to own shares.

The people are more involved now and the legacy we want to leave in Ghana is for Ghanaians to own and have a direct say on issues bordering on the power sector,” Mr Chapman pointed out.

Ugandans and other African nationals now hold 52 per cent shares in Umeme Limited with the remaining 48 per cent going to foreign investors.

Study Tour

A Deputy Minister of Energy and Petroleum, Mr John Jinapor, led a delegation on a two-week study tour to India and Uganda to gather information on the challenges and success stories of these countries with regard to private sector participation in the power sector.

The tour, which was organised by the United States Energy Association (USEA), with sponsorship from the United States Agency for International Development (USAID), enabled the participants to better understand Private Sector Participation (PSP) models and to hear directly from electricity distribution utility management and staff, government agencies, regulatory bodies, Independent Power Producers (IPPs), industries, consumer groups and financial institutions on the lessons learned, benefits and challenges of PSP in distribution in both countries.  

Ghana is expected to access $498.2 million under the Millennium Challenge Corporation (MCC) second compact.

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