Umeme

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Umeme
Company typePublic Utility: USE: UMEME
IndustryEnergy industry
Founded2004
HeadquartersKampala, Uganda
Key people
Patrick Bitature,
chairman[1]
Selestino Babungi,[2]
managing director
ServicesElectricity
RevenueIncreaseAftertax: UGX:105.9 billion (US$30.9 million) (2015)[3]
Total assetsUGX:1.399 trillion (June 2015)[4]
Number of employees
1,389+ (2014)[4]
WebsiteHomepage

Umeme Company Limited is the largest energy distributor in Uganda, distributing 97 percent of all electricity in the country.[5] 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).[6] 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.[4] 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.[7]

Formation and ownership

Umeme was formed in 2004[8] 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.[9] The transfer of assets did not take place until 1 March 2005.[10]

During 2006, the consortium formed by Globeleq and Eskom was restructured with Globeleq becoming the sole owner of Umeme.[11]

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).[12] The shares of the company started trading on the USE on 30 November 2012.[13] Umeme stock shares were first cross-listed on the NSE on 14 December 2012.[14] The company expects to use the proceeds from the IPO, estimated at UGX:171 billion, to expand its power distribution network and payoff debt.[15][16]

As of December 2014, the ten largest shareholders in the stock of the company were:[4]

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.[17] 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:[18]

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[19]
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.[20]

Unreliability of service

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[21] and, according to a 2009 published report, mismanagement.[22] Customers frequently face extended service outages,[23][24] 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.[25]

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.[26] 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.[27]

In 2012, after a month-long outage along the Kampala-Gayaza road, stone-throwing protesters caused property damage and injuries.[28]

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.[29] 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.[30]

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.[31]

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.[32] Ultimately, this course of action was decided against because it would have been too expensive and politically complicated.[33]

Power losses

As of June 2015, Umeme management estimated total power loss across their network at 19.2 percent. Of that 13 percent is attributable to technical losses (due to poor network configuration), and 6.2 percent due to commercial losses (power theft and under-billing). Umeme plans to reduce total power loss to 15 percent by 2018.[34]

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.[35]

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.[36]

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.[37]

Umeme is spending US$440 million between 2013 and 2018 to overhaul equipment, buy technology, and add distribution points.[38]

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.[39]

See also

References

  1. ^ Umeme (17 February 2016). "UMEME: Board of Directors". Umeme. Retrieved 17 February 2016.
  2. ^ Ladu, Ismail Musa (16 March 2015). "Umeme gets new chief executive officer". Daily Monitor. Kampala. Retrieved 16 March 2015.
  3. ^ Busuulwa, Bernard (26 March 2016). "Umeme profits rise to $30.9m as shilling strengthens". The EastAfrican. Nairobi. Retrieved 27 March 2016.
  4. ^ a b c d Umeme (21 August 2015). "Umeme Limited Condensed Interim Financial Statements (Unaudited) for the Six Months Ended 30 June 2015" (PDF). Kampala: Umeme Limited (Umeme). Retrieved 25 March 2016.
  5. ^ Wesonga, Nelson (28 March 2016). "Poor power network worries electricity company". Daily Monitor. Kampala. Retrieved 28 March 2016.
  6. ^ Mugwe, David (1 August 2013). "Umeme makes first trade at NSE, electronic share transfer goes live". The EastAfrican. Retrieved 6 May 2014.
  7. ^ Wakabi, Michael (9 January 2016). "Umeme customer base to hit 1 million in 2016". The EastAfrican. Nairobi. Retrieved 12 January 2016.
  8. ^ "About Umeme Limited". Actis Capital. Retrieved 6 May 2014.
  9. ^ Busharizi, Paul. "UEDCL sold, $65m injection seen by 2010". New Vision. Kampala. Retrieved 16 February 2016.
  10. ^ Mare, Paul (16 August 2007). "An insight into Umeme concession and work". New Vision. Kampala. Retrieved 16 February 2016.
  11. ^ Kasita, Ibrahim (22 February 2007). "=Umeme owner Globeleq up for grabs". New Vision. Kampala. Retrieved 16 February 2016.
  12. ^ Ilungole, Stephen (12 October 2012). "Regulators finally approve UMEME IPO". New Vision. Kampala. Retrieved 16 March 2015.
  13. ^ Sanya, Samuel (21 October 2012). "UMEME shares selling fast". New Vision. Kampala. Retrieved 6 May 2014.
  14. ^ Independent Reporter (23 December 2012). "Umeme cross lists in Nairobi". The Independent (Uganda). Kampala. Retrieved 16 February 2016.
  15. ^ Businge, Julius (9 November 2012). "Umeme IPO oversubscribed". The Independent (Uganda). Kampala. Retrieved 6 May 2014.
  16. ^ Ilungole, Stephen (16 October 2012). "Umeme IPO: 46% shares bought". New Vision. Kampala. Retrieved 17 February 2016.
  17. ^ "Members of Umeme Board of Directors". Umeme. Retrieved 6 May 2014.
  18. ^ UMEME (26 March 2016). "Umeme: Senior Management Team". Kampala: Umeme Limited (UMEME). Retrieved 26 March 2016.
  19. ^ Ladu, Ismail Musa (13 February 2012). "Umeme to realign operations with two new appointments". Daily Monitor. Kampala. Retrieved 6 May 2014.
  20. ^ Vision Reporter (20 May 2009). "Electricity utility boss resigns". New Vision. Kampala. Retrieved 17 February 2016.
  21. ^ Nelson Wesonga, and Isaac Imaka (11 December 2013). "Kadaga orders Umeme bribery claims probe". Daily Monitor. Kampala. Retrieved 17 February 2016.
  22. ^ Observer (11 August 2009). "Inside the Umeme power tariff scandal". The Observer (Uganda). Kampala. Retrieved 17 February 2016.
  23. ^ Busuulwa, Bernard (21 October 2015). "Power cuts: No respite for Umeme's large users". The East African. Nairobi. Retrieved 17 February 2016.
  24. ^ WB (2014). "Power outages in firms in a typical month (number)". Washington, D. C.: World Bank. Retrieved 17 February 2016.
  25. ^ Gulumaire, Andrew (19 November 2010). "8 Ugandans remanded over Jinja Umeme riot". Daily Monitor. Kampala. Retrieved 17 February 2016.
  26. ^ Biryabarema, Elias (2 December 2016). "Uganda power cuts provoke riots, threaten economy". Reuters.com. Retrieved 17 February 2016.
  27. ^ Kitatta Kaaya, Sadab (4 December 2011). "Police take over Umeme offices". The Observer (Uganda). Kampala. Retrieved 17 February 2016.
  28. ^ Administrator (17 January 2012). "Umeme Riots Rock Kampala, Wakiso". Kampala: Chipreports.com. Retrieved 17 February 2016.
  29. ^ Kagiri, Luke (26 April 2014). "Umeme boss beaten by mob in Mubende". New Vision. Kampala. Retrieved 13 February 2016.
  30. ^ Kafeero, Stephen (18 September 2014). "Nasser Road traders riot after 6 days power outage". Daily Monitor. Kampala. Retrieved 17 February 2016.
  31. ^ Abdallah, Halima. "Uganda faces high bill to end Umeme deal". The East African. Nairobi. Retrieved 17 February 2016.
  32. ^ "Terminate Umeme and Eskom Contracts". Uganda: parliament.go.ug. 27 March 2014. Retrieved 3 May 2016.
  33. ^ "Why Umeme contract will not be terminated". Uganda: Observer. 8 April 2014. Retrieved 3 May 2016.
  34. ^ Anyanzwa, James (12 December 2015). "East Africa electricity firms in bid to reduce power losses". The EastAfrican. Nairobi. Retrieved 4 June 2016.
  35. ^ Kemigyisha, Charlotte (May 2010). "Make electricity vandalism a capital offence". Daily Monitor. Kampala. Retrieved 13 February 2016.
  36. ^ Ojambo, Fred (30 November 2010). "Umeme Uganda to Invest $32 Million in Power Substations in 2011". Bloomberg News. Retrieved 6 May 2014.
  37. ^ Reuters (13 November 2013). "Ugandan power firm Umeme gets $190 million for grid expansion". Thomson Reuters. Retrieved 17 February 2016. {{cite web}}: |last= has generic name (help)
  38. ^ Ojambo, Fred (9 April 2015). "Umeme Will Invest Up to $100m Upgrading Uganda Network This Year". Bloomberg News. Retrieved 17 February 2016.
  39. ^ Muhumuza, Mark Keith (23 March 2016). "Umeme to distribute Karuma, Isimba power". Daily Monitor. Kampala. Retrieved 23 March 2016.

External links

Retrieved from "https://en.wikipedia.org/w/index.php?title=Umeme&oldid=723890292"