Kampala, Uganda, December 12, 2019—IFC,
a member of the World Bank Group,
today announced a long-term investment of up to $70 million in Uganda’s
electricity distribution utility, Umeme Limited, to help the company increase
the reliable supply of electricity to homes and businesses in Uganda, supporting
economic and social development in the country.
IFC will lend Umeme up to $28 million from its own account and mobilize
$42 million from two commercial banks (Stanbic and Standard chartered Bank)
and the Dutch Development Bank (FMO). The investment will support improvements
to the country’s distribution network, helping bring power to electricity-starved
rural areas especially. Uganda’s electrification rate is among the lowest
in the world.
Patrick Bitature, Chairman of the Umeme Board, said, “This funding will
allow Umeme to continue investing in the distribution network to enable
power evacuation given the increased generation capacity, improved supply
reliability, technical loss reduction and additional connections to support
increased electrification in Uganda. The financing will be utilized over
the next two years to support Umeme’s capital expenditure program.”
Manuel Moses, IFC Country Manager
for East Africa, said, “This investment shows how IFC can mobilize private
capital for essential infrastructure programs in places where public funding
is limited. Umeme is a long-standing IFC partner and has an excellent track
record in loss reduction and collections improvement from power consumers.
It has almost quadrupled its customer base to serve over 1.3 million customers
from 2005. This investment will help it reach even more Ugandans.”
Uganda is one of the few countries
in sub-Saharan Africa that has successfully separated power generation,
transmission, and distribution, resulting in financial sustainability of
the sector. This was achieved with support from the World Bank Group, which
is helping leverage private investments into the country’s power sector.
In 2005, Umeme was granted a 20-year concession to operate, maintain, and
manage the then newly-privatized distribution network.
IFC finances electricity generation,
transmission, and distribution upgrades in developing countries with a
focus on natural gas and renewable energy such as solar, wind, and hydropower.
IFC also helps remove barriers to private sector investment in the power
sector by identifying and developing new market opportunities and supporting
new technology and business models with potential to scale.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
where they are needed most. In fiscal year 2019, we delivered more than
$19 billion in long-term financing for developing countries, leveraging
the power of the private sector to end extreme poverty and boost shared
prosperity. For more information, visit www.ifc.org.