Powering Ahead: The Reform of the Electricity Sector in Uganda

Uganda is among the very few countries in Africa that have fully embraced reforms in the electricity sector. These reforms that included unbundling, privatization, and the creation of an independent regulator were intended to improve sector performance and efficiency. The key feature of Uganda’s model is that it sought privatization in the form of concessions and encouraged competition in the form of independent power producers on long term contracts. By focusing on developments in the generation and distribution segments, this paper gives a recount of the reforms and evaluates the progress made. Despite the post reform crises that rocked the electricity sector in 2005–2006 and again in 2011–2012 occurrences of load shedding have reduced greatly; the crisis periods have been replaced by promising developments. This has been on account of additional generation capacity and the Umeme license review that set new operational targets in distribution. We argue that the renewed Government commitment in the sector is set to lead to improved sector performance. In addition we propose some policy and regulatory measures that could lead to further improvements in the sector.