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Using Private Equity to Improve Power Distribution in Uganda

By the summer of 2004, Fred Kalisa, the Permanent Secretary in Uganda’s Ministry of Energy, had dedicated the past ten years of his life to building his nation’s energy sector and two summers ago he had spearheaded the government’s wide-reaching Energy Reform drive. That effort split the vertically-integrated Ugandan Electricity Board (UEB) into three distinct state-owned companies to manage generation, transmission and distribution, respectively.  The next few weeks would likely determine whether that hard work paid off, in what was to potentially be Africa’s first electricity distribution concession granting and privatization. He faces two major problems: the reluctance of private companies to join the concession and the fact that current tariffs or rates are insufficient to cover operation and maintenance costs, let alone necessary future investments. Privatization or a PPP will require raising tariffs but Kalisa is under great pressure to secure terms favorable to the people of Uganda. 

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