UEDCL and Absa bank officials in a group photo after signing the loan agreement
Uganda Electricity Distribution Company Limited (UEDCL) has signed a multibillion deal with Absa Uganda to boost the giant utility’s distribution network.
The five-year US 50 million (about sh190 billion) financing, signed this morning at the UEDCL Tower in Nakasero, Kampala, will support network upgrades and reinforcements, commence on smart grid initiatives, build new electricity substations which will improve electricity reliability, reduce technical losses, which will unbundle the current suppressed demand by close of 2026, and the integration of renewable energy generation.
The UEDCL Board Chairperson, Lydia Ocheng-Obo, stressed that the deal is timely given the network’s thirst for funding.
The agreement, she continued, is a sign of support for UEDCL and the government as a whole and establishes a standard for government agencies within and outside the energy supply sector to borrow money directly from the private sector.
In addition to the private sector’s involvement, Paul Mwesigwa, Managing Director of the UEDCL, clarified that the funding would help the government’s ambitious industrial and universal electricity access strategy, reliability, and overall electricity affordability.
“UEDCL will be able to greatly enhance the nation’s distribution network with this funding,” he said.
At the signing ceremony of the UEDCL-Absa loan agreement at the UEDCL headquarters in Nakasero, Kampala, Paul Mwesigwa, Managing Director of UEDCL, stated, “This investment will enhance the reliability and efficiency of electricity supply system, thereby cementing our role in supporting Uganda’s economic growth.”
“We appreciate Absa Bank, our shareholders Hon. Dr. Canon Ruth Nankabirwa and the Hon Matia Kasaija for granting UEDCL a no-objection to this loan, and we look forward to delivering all projects aimed at enhancing the distribution network,” said, adding that the Electricity Regulatory Authority (ERA) permitted this loan in the tariff in an attempt to make the distribution segment self-sustainable.
Mwesigwa underlined that this deal comes at a lower interest rate of 8% VAT inclusive lower than the market rate of 28% VAT inclusive.
David Wandera, the Managing Director, Absa Bank Uganda, observed that as a pan-African bank with experience in infrastructure and energy financing, they were committed to mobilising long-term capital that supports Africa’s development ambitions.
“Reliable power distribution is fundamental to Uganda’s industrialisation, competitiveness, and inclusive growth. This facility reflects Absa Bank Uganda’s long-term commitment to financing infrastructure that unlocks productivity and improves the quality of life for communities across the country. By partnering with UEDCL at this critical investment phase, we are supporting a more resilient, efficient, and future-ready power distribution network aligned to Uganda’s Vision 2040 and National Development Plan IV,” Wandera said.
