Eskom hands over Nalubaale, Kiira power stations to Government

The move follows Government of Uganda’s decision not to renew the 20-year concession it had, in 2002, extended to the company in a move that it hoped would help improve power generation in the country.

Government says the move not to renew the concession is premised on the commitment to reduce power tariffs, with a target of $5 Kilowatt for both industrial and domestic consumers.

In a speech delivered by the State Minister for Energy, Peter Lokeris, during the handover event held at Nalubaale hydropower plant in Jinja, the Minister for Energy, Ruth Nankabirwa, said Government of Uganda is carrying out a special audit in order to inform itself on the possible buyout amount if any at the end of the concession.

“In order to facilitate the transfer process, the energy ministry is undertaking an audit through the office of the Auditor General to help inform Government on any potential buyout if any at the end of the concession. We are prepared for those plants, Kiira and Nalubaale, to be run by our very own Uganda Electricity Generation Company Limited (UEGCL),” she said.

Nankabirwa added that Government is very much aware about the enormous investments made by Eskom on the two dams. She also said Government signed a support agreement relating to both Nalubaale and Kiira hydropower dams which provides for a buy out at the end of the 20-year concession.

On October 3 2022, the Cabinet directed the Ministry of Energy and Mineral Development not to renew the concession and privatisation agreements for Eskom Uganda Limited and Umeme after they run their course.

Following the Cabinet decision, the ministry moved to communicate to both energy companies about the Government decision not to renew their 20-year concession.

According to a Daily Monitor report, twenty years ago, Uganda, in bold reforms, unbundled and privatised large parts of the power sub-sector.

The sub-sector reforms were championed by the World Bank Group and other international development agencies as part of a Public Sector Restructuring and Privatisation Strategy. This was intended to make the power sub-sector in Uganda financially sustainable and efficient.