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Umeme
Country: Uganda
Market: Uganda
Date of original investment: 2009
Deal type: Replacement
The power to transform​
For many decades, Uganda’s economy suffered from destructive politics and instability, leaving it in a state of extreme poverty. But since the start of the 21st century, the country has been on an upward swing, recording 7.2% growth in 2009, despite the global downturn.

As the national electricity distribution company, Umeme is indicative of the country’s transformation. During many years of neglect, its network of over 20,000 km of poles, sub stations and wires fell into disrepair. Termites and tropical temperatures rotted the poles leading to fallen wires along the network – often in hard-to-reach rural locations which sometimes posed safety risks to the population.

Since Actis took over the ownership of Umeme following a privatisation process in 2005, the company went through a transformation phase, ramping up capital expenditure, improving the quality of management, formalising procedures, introducing a culture of safety throughout the organisation, and educating the population (mainly children) on the benefits and risks of electricity. By the end of 2010, Umeme had replaced over 120,000 rotten poles as part of its refurbishment programme.

Safety is the top priority. The network restoration plans are on target and are due for completion by the end of 2012. Public, employee and contractor safety have improved, but public fatalities continue to occur, primarily because people come into contact with live conductors associated with pockets of the network yet to be refurbished. Umeme, guided by Actis, continues to make a significant effort to eradicate fatalities associated with its network. Much of this progress relies on an extensive school education programme, a 24-hour safety helpline, and the prompt response of the field teams on the ground – in the past it could take up to half a day to make the area around a fallen or unstable pole safe – now the average is 30 minutes.

Uganda’s continued growth is pushing up demand for electricity: today approximately 7% of the population has access to electricity. And the proportion of population that has access is growing by 9% per year. Currently, the company connects more than 40,000 new customers every year.

In November 2012, Umeme launched its IPO, opening up share ownership to its customers and employees. The share offering was 37% oversubscribed with very strong interest from retail customers and East African institutions.