Paul Mwesigwa, UEDCL’s managing Director (2nd L) signing the funding agreement on behalf of his organisation and David Wandera (2nd R) Absa Managing Director, signing on behalf of the bank on Monday, December 15th 2025
HABARI DAILY I Kampala, Uganda I Uganda Electricity Distribution Company Limited (UEDCL) has sealed a landmark five-year financing deal worth US$50 million (about Shs190 billion) with Absa Bank Uganda, a move expected to significantly strengthen the country’s electricity distribution network and improve reliability nationwide
The agreement, signed on Monday at the UEDCL headquarters in Nakasero, Kampala, will fund major network upgrades and reinforcements, the rollout of smart grid initiatives, construction of new electricity substations, and the integration of renewable energy generation into the distribution system
The investment is also aimed at reducing technical losses and unbundling suppressed demand by the close of 2026.
Speaking at the signing ceremony, UEDCL Managing Director Paul Mwesigwa said the facility marks a turning point for the utility, which formally took over electricity distribution following the expiry of Umeme’s 20-year concession at the end of 2024.
“UEDCL will be able to greatly enhance the nation’s distribution network with this funding,” Mwesigwa said. “This investment will enhance the reliability and efficiency of the electricity supply system, thereby cementing our role in supporting Uganda’s economic growth,” he added
Mwesigwa noted that the financing aligns with government’s broader industrialisation agenda and the goal of universal access to electricity, while also improving affordability for consumers.
He emphasised that the loan was approved by the Electricity Regulatory Authority (ERA) and factored into the tariff structure to help make the distribution segment self-sustaining.
“We appreciate Absa Bank and our shareholders, Hon. Dr. Canon Ruth Nankabirwa and Hon. Matia Kasaija, for granting UEDCL a no-objection to this loan,” Mwesigwa said, adding that the projects financed under the facility will directly enhance network performance across the country
He further highlighted the concessional nature of the deal, pointing out that the facility carries an interest rate of about 8 per cent VAT inclusive, far below prevailing market rates that can reach up to 28 per cent.
UEDCL Board Chairperson Lydia Ocheng-Obo described the agreement as timely, noting that the national distribution network has long suffered from under investment.
She said the Absa facility not only demonstrates confidence in UEDCL’s new operational role but also sets an important precedent for government agencies to directly access private sector financing for infrastructure development.
On its part, Absa Bank Uganda said the partnership reflects its long-term commitment to financing projects that unlock productivity and inclusive growth. Absa Managing Director David Wandera said reliable power distribution is a cornerstone of Uganda’s industrialisation drive and competitiveness.
Beyond the immediate upgrades, the investment is expected to support Uganda’s Vision 2040 and National Development Plan IV, which prioritise energy infrastructure as a driver of economic transformation.
UEDCL, established under the Electricity Act of 1999 and mandated to own all electricity distribution assets below 33kV, now faces the task of rapidly modernising an ageing network.
With electricity demand projected to continue rising due to industrial growth and urbanisation, the Absa-backed investment is seen as a critical boost toward a more resilient, efficient and future-ready power distribution system for Uganda.
About the Author
