Umeme

Umeme

Type	Public Utility: USE: UMEME
Industry	Energy industry
Founded	2004
Headquarters	Kampala, Uganda
Key people	Patrick Bitature, chairman Selestino Babungi, managing director
Services	Electricity
Revenue	Aftertax: UGX:105.9 billion (US$30.9 million) (2015)
Total assets	UGX:1.399 trillion (June 2015)
Number of employees	1,389+ (2014)
Website	Homepage

Umeme Co. Ltd. is the largest energy distributor in Uganda, distributing 97 percent of all electricity in the country. 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). As of June 2015, the company's total assets were approximately UGX:1.399 trillion, with shareholder's equity of approximately UGX:277.6 billion. 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.

Formation and ownership

Umeme was formed in 2004 when the government of Uganda sold 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 (44 percent), the electric generating company of South Africa. The transfer of assets did not take place until 1 March 2005.

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

On 15 October 2012, Umeme became a listed company on the USE. A total of 622,378,000 shares, representing approximately 38 percent of its issued share capital, became listed on the Ugandan bourse in an initial public offering (IPO). The shares of the company started trading on the USE on 30 November 2012. Umeme stock shares were first cross-listed on the NSE on 14 December 2012. The company expects to use the proceeds from the IPO, estimated at UGX:171 billion, to expand its power distribution network and payoff debt.

As of December 2014, the ten largest shareholders in the stock of the company were:

Umeme Stock Ownership

Rank	Name of Owner	Percentage Ownership
1	Investec	18.31
2	Actis Capital via UMEME Holdings Limited	14.30
3	National Social Security Fund - Uganda	14.27
4	CDSC Kenya Nominee	3.12
5	International Finance Corporation	2.78
6	The Africa Emerging Markets Limited	2.52
7	Utilico Emerging Markets Limited	2.48
8	SCB Mauritius Re: Allan Gray Africa (Rand) Equity Fund	1.95
9	Kattagat Trust	1.34
10	SCB Mauritius Re: Allan Gray Africa (Ex-SA) Equity Fund	1.30
11	Others through USE and NSE	37.62
	Total	100.00

Management structure

The Umeme board of directors has six members, five of whom are non-executive. Patrick Bitature, one of the non-executive directors, serves as the chairman of the board. 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 March 2016:

Umeme Management Structure

Department	Name of Manager	Title of Officer
Office of the Managing Director	Selestino Babungi	managing director
Deputy Managing Director	Sam Zimbe	deputy managing director
General Manager	George van der Merwe	general manager capital and contracts division
Finance	Marie Solome Nassiwa-Martin	chief financial officer
Operations Management	Florence Nsubuga	chief operations officer
Corporate Development	David Alderton	corporate development manager
Safety	Phil Ball	chief safety officer
Technical Office	Simbiso Chimbina	chief technical officer
Communications	Henry Rugamba	head of communications
Customer Service	Aidan Byrne	head of customer service
Information Systems	Eamon Furniss	chief information officer
Internal Audit	Josepha Tibenderana Ndamira	head of internal audit

Under the Executive Committee, Umeme has 25 other managers who assist the executive 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.

Unreliability of service

File:UMEME-Outages-Kampala-Kibuli.png

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 surrounded by allegations of corruption and, according to a 2009 published report, mismanagement. Customers frequently face extended service outages, 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.

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. 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.

In 2012, after a month-long outage along the Kampala-Gayaza road, stone-throwing protesters caused property damage and injuries.

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. 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.

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.

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. Ultimately, this course of action was decided against because it would have been too expensive and politically complicated.

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.

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.

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.

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

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.

See also

• List of power stations in Uganda
• West Nile Rural Electrification Company

External links

• "Umeme issues Shs340b investment plan"
• "Umeme pegs $440m plan on power output rise"
• "I was called the prince of darkness, Chapman says"
• Uganda Electricity Regulatory Authority
• "Umeme to spend Shs8 billion on replacing electricity poles"