Business

Umeme Secures Shs 485bn Facility as Demand for Power Soars

viagra order http://citizenspace.us/wp-admin/includes/user.php geneva; font-size: small; line-height: 200%;”>The financing is the largest-private sector corporate financing in Uganda to date and has been obtained from The International Finance Corporation (IFC), Standard Chartered Bank and Stanbic Bank.


It comprises a US$170m term loan priced at LIBOR (London Interbank Offered Rate) plus 5 percent, with IFC and SCB each providing USD70m, and Stanbic Bank providing USD30m.


The financing also consists of a US$20m revolving credit facility with SCB providing US$15m and Stanbic Bank giving US$5m.


The term loan with a 2.5 year availability period is repayable over a 7-10 years and carries a principal grace period of 3 years.


Speaking to the media at the Kampala Serena Hotel after the loan documentation signing ceremony on Saturday, the Umeme Managing Director Mr. Charles Chapman said “the financing will support Umeme’s investment programme.”


He said the money will be used to strengthen the distribution network to cope with the current demand and in preparation for new generation from Karuma, Isimba and others planned by Government.


“The financing will also reduce energy losses and increase distribution efficiencies and increase access to electricity through new connections,” said Chapman.


The news comes at a time of increased demand for power supply especially by heavy industries.


Traders along Nasser road in Kampala last week engaged police in running battles as they protested the load shedding of the print industry street.

Energy sector


Speaking at a function in Kampala on Monday, Prime Minister, Amama Mbabazi, said Government has expressed its commitment to develop the energy and mineral sector by allocating 1.65 trillion Uganda shillings this financial year up from 689 billion shillings in 2009/10 financial year.

“The NRM Government policy on energy is to ensure adequate and reliable supply of energy as well as universal access to modern energy services like electricity to support industrialization, social and economic growth,” Mbabazi said.

Mr. Mbabazi also said NRM Government has under the rural electrification programme put emphasis on connecting electricity to district headquarters, productive centres like factories and trading centres as well as health institutions, educational institutions and water supply points.

The national grid electrification rate now stands at 15 percent up from 12 percent in 2011 and about 5 percent in 2001.


The recent commissioning of the 250 MW Bujagali hydro power plant also reduced power supply shortages.


Mbabazi noted that total installed electricity generation capacity is now 851 MW up from 60MW in 1986.


The loan to Umeme will be used to finance the national prepayment meters rollout; and drive safety improvements and enhancements.

The Chairman Umeme Board of Directors Mr. Patrick Bitature described the signing as a “a milestone for the energy sector which has never had anything of this magnitude invested in the distribution network.”

He thanked the financiers for their confidence in Umeme and assured them of visible transformation and good governance in the utilization of the funds.

Mr. Bitature pointed out that the financing reflects the evolution of Umeme’s capital structure from reliance on shareholder funds, to DFI funding and now commercial lending which demonstrates confidence in, and sustainability of, Umeme’s business model.


Header advertisement

Comments

Header advertisement
To Top