Plans by government to merge Uganda's electricity generation, transmission and distribution companies have sparked debate over whether the restructuring will improve service delivery or create new management challenges in an already struggling sector.
Cabinet has renewed its directive to the Ministry of Energy and Mineral Development to fast-track the rationalisation of government institutions performing similar functions, placing the Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL) and Uganda Electricity Distribution Company Limited (UEDCL) at the centre of the proposed reforms.
The proposal comes as government continues to grapple with electricity supply challenges and questions over the efficiency of its public institutions.
However, political analyst Godber Tumushabe questions the logic of merging the three electricity companies, arguing that institutional restructuring alone may not address the underlying weaknesses in public sector management.
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Tumushabe warns that bringing the companies together without a clearly defined operational justification could complicate management and create unnecessary disruptions.
"I think bundling together these three agencies in the electricity sector without a clear logic can actually cause unnecessary disruptions that we have seen even in other sectors," Musabe says.
He draws comparisons with the agricultural sector, particularly the integration of the Uganda Coffee Development Authority (UCDA) into the Ministry of Agriculture, Animal Industry and Fisheries, questioning whether farmers have experienced the improvements promised under the restructuring.
Tumushabe says farmers continue to struggle to access coffee seedlings and irrigation support, raising concerns about whether transferring specialised institutional functions to parent ministries necessarily translates into better services.
He argues that government should instead prioritise reforms within its political and administrative leadership structures, which he considers a major obstacle to efficiency.
"The most important thing for me is that you have to rationalise the political structure. The current political structure is the problem. It is a major obstacle to how you even do reforms, but also how you could get efficiency," he says.
But the Ministry of Energy and Mineral Development maintains that the proposed restructuring is intended to address operational inefficiencies and improve coordination across the electricity supply chain.
The ministry's Head of Communications, Dr Patricia Litho, says the ministry has received Cabinet's directive and is working on the necessary arrangements to implement the reforms.
She explains that the process required additional time, partly because of the transition in electricity distribution from Umeme Limited back to UEDCL in April 2025.
"It was just a reminder to the Ministry of Energy to get an update on how far we have gone and how quickly we should do this. There are a number of things happening to make sure that it is effected that I cannot necessarily discuss right now," Litho says.
She argues that bringing the institutions under one management structure could eliminate delays arising from separate command structures and improve coordination when responding to operational challenges.
According to Litho, the current arrangement sometimes requires officials in one institution to seek clearance from their respective chief executives before taking decisions that affect another institution, even when immediate action is required.
"By being one company, the efficiency I see is that now you are one company, you appreciate each other better. As opposed to right now, where you are different companies, there are different command posts," she says.
Litho adds that the restructuring is expected to improve coordination across the electricity supply chain, although the government is yet to publicly detail the full implementation arrangements.
The debate comes against the background of Uganda's electricity sector reforms initiated in the late 1990s.
Following the liberalisation of the electricity industry and the enactment of the Electricity Act in 1999, government unbundled the former Uganda Electricity Board (UEB), which had managed electricity generation, transmission and distribution under one institution.
The reforms created separate companies responsible for generation, transmission and distribution, with the intention of improving efficiency and introducing competition into the electricity industry.
Under the current arrangement, UEGCL manages government-owned generation assets, UETCL operates the high-voltage transmission network and manages electricity dispatch, while UEDCL is responsible for electricity distribution.
The Electricity Regulatory Authority (ERA) provides oversight of the industry, including licensing and tariff regulation.
However, government is now considering bringing the three companies under a more consolidated management arrangement, nearly three decades after the original restructuring.
The proposed changes also come at a sensitive time for electricity distribution. Since UEDCL took over the national distribution network following the expiry of Umeme's 20-year concession in April 2025, the company has faced challenges relating to outages, ageing infrastructure and the response time to faults.
In its recent assessment, ERA indicated that improvements in electricity reliability would require time, with major infrastructure interventions expected to take between 18 months and two years to deliver results.
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Against this background, questions remain over how the proposed institutional changes would affect ongoing investments, operational responsibilities and the delivery of electricity to consumers.
UEDCL Managing Director Engineer Joselynne Rwabwogo Rwakakooko says the company is awaiting further guidance from government but insists that its immediate responsibility remains maintaining electricity distribution services.
"We await the way forward just like you. However, what I can assure you is that there will always be, whether merged or unmerged, a customer that has to be served on the distribution network," Rwabwogo says.
She adds that the company will continue strengthening its performance as government considers the proposed changes.
The wider government rationalisation programme, known as the Rationalisation of Government Agencies and Public Expenditure (RAPEX), is intended to eliminate duplication, reduce administrative costs and improve public service delivery.
However, the Office of the Auditor General has previously highlighted implementation challenges, including uncertainty over staff absorption, difficulties transferring assets and liabilities, and delays in developing institutional reorganisation strategies.
As government pushes ahead with the reforms, the challenge will be demonstrating that consolidating institutions can deliver measurable improvements in efficiency, accountability and electricity supply without disrupting services.
