Kampala, Uganda, November 13, 2013—IFC,
a member of the World Bank Group, announced today that it will provide
$70 million in loans as part of a $190 million long-term financing package
to Uganda’s electricity distribution utility, Umeme Limited, helping the
company meet increasing demand for power from homes and businesses, while
controlling costs and improving operational efficiency.
IFC's participation in the financing encourages
private commercial financiers and supports an existing client in an important
sector for Uganda’s economy. Stanbic and Standard Chartered Bank also
participated in the financing.
Uganda is one of the few developing countries
that has successfully unbundled power production and distribution and put
it on the path of sustainable reform. This has been achieved with strong
support from the World Bank Group, which is expected to continue as the
needs of the sector and consumers evolve.
Patrick Bitature, Chairman of the Umeme Board,
said, “This financing is a milestone for the energy sector, which has
never had anything like this level of investment in the distribution network.
The financing supports a capital expenditure program by Umeme of up to
$439 million from 2013-18. The capex program targets new connections, upgrading
and expansion of medium voltage transmission lines and substations, and
the introduction of pre-paid meters across a large spectrum of customers,
including government ministries and other offices.”
Ram Mahidhara, IFC Portfolio Manager for Infrastructure
and Natural Resources in Sub-Saharan Africa, said, “IFC, together with
other World Bank Group institutions, has been committed to the successful
reform of the power sector in Uganda to help meet the needs of consumers
and grow the economy. Since 2009, IFC has provided financing for Umeme’s
growth and development and we will continue to support the company’s successful
development to ensure more efficient and reliable energy distribution.”
With only about 10 percent of its population
connected to the grid, and about half that in rural areas, Uganda urgently
needs an extended and improved electricity network. Umeme's capital expenditure
program begins to address the deficiencies of the distribution network,
which is an impediment to growth.
Electricity is the most frequently cited obstacle
to developing business in Sub-Saharan Africa. A significant amount of private
sector revenues are lost each year because of frequent power outages and
the high cost of installing, maintaining and operating backup generation
IFC, a member of the World Bank Group, is
the largest global development institution focused exclusively on the private
sector. Working with private enterprises in more than 100 countries, we
use our capital, expertise, and influence to help eliminate extreme poverty
and promote shared prosperity. In FY13, our investments climbed to an all-time
high of nearly $25 billion, leveraging the power of the private sector
to create jobs and tackle the world’s most pressing development challenges.
For more information, visit www.ifc.org