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Power Theft and Vandalism Affect Profitability in Uganda: Kilembe Investment Takes Action

Innocent Kiiza is an Enviromental Investigative Journalist with passion for Climate Change, Water and Wildlife.

BY INNOCENT KIIZA

High levels of power theft and vandalism, fueled by the misconception that electricity is freely provided by the Ugandan government, have led to significant commercial losses. Kilembe Investment Limited, despite facing these challenges, has managed to report a profit of 481 million Ugandan shillings by June this year, compared to 164 million in the previous financial year of 2022.

Ericana Bwambale, the Chairperson of the Board of Directors at Kilembe Mines, addressed shareholders at the 22nd Annual General Meeting on October 27. He emphasized the need to tackle power theft and vandalism head-on by establishing a surveillance task team in collaboration with security agencies.

Bwambale called upon shareholders to actively participate in reporting any individuals involved in power theft or vandalism of company equipment. He stressed the importance of shareholders not allowing their neighbors to steal power, as it ultimately affects their businesses and leads to losses within the company.

Despite the challenges, Kilembe Investment has shown resilience and growth, which has enabled them to start paying dividends to shareholders. The company’s profitability is on an upward trajectory, marking a turning point for its expansion and growth.

Jane Burungi Masika, the Chief Executive Officer of Kilembe Investments Limited-KIL, highlighted that commercial losses, amounting to about 20% of the total, have been a significant obstacle to profitability, translating to over 500 million Ugandan shillings in losses. These losses are a concern for shareholders, and they are attributed to various factors, including power theft, vandalism, and insufficient infrastructure.

Kilembe Investment had incurred a loss of 2.5 billion Ugandan shillings over a five-year period from 2018 to 2022. While power theft and vandalism were contributing factors, the absence of independent evacuation or transmission lines for power plants was also a concern. These transmission lines are still under government planning.

In response to power load shedding in Bukonzo West, Jane Burungi explained that the existing infrastructure was unable to handle the load from various power plants, resulting in increased tension on the lines and higher bills for Kilembe Investment. This situation created indebtedness to the Uganda Electricity Transmission Company Limited (UETCL).

To address this issue, the regulator approved a 5.9% provision on evacuation losses in July 2022, significantly reducing Kilembe Investment’s monthly purchase bills. The company had been suffering such losses since 2018, and the claim for compensation was submitted to the regulator and UETCL.

However, the impact of Covid-19 further delayed projects that were under construction. Many contracted companies faced bankruptcy due to the pandemic, which led to standstill projects. Opolot Okasai, the State Minister for Energy and Mineral Development, acknowledged the challenges posed by the pandemic and assured that the government was actively seeking alternative companies to complete these projects.

Okasai also addressed the issue of vandalism and warned residents against engaging in power theft and vandalism. He emphasized that culprits would face significant penalties in accordance with the Bill on Vandalism amended in 2022. The amendment bill specifically targets power theft and vandalism of infrastructures, with fines ranging from 20,000 curency points (equivalent to UGx 200-400 million) for power theft to a billion and above for infrastructure vandalism.

Okasai recognized the value of electricity and the government’s investment in generating and distributing it. He stressed that vandalism of infrastructure would not be tolerated, and those found guilty would be held accountable for their actions. He called upon parents to educate their children about the consequences of vandalism and discourage them from engaging in such activities.

In response to the challenges posed by the existing infrastructure’s inability to handle the load, Okasai promised to work with technical teams to find a permanent solution. This solution may involve constructing separate evacuation lines to offload the tension load on the transmission lines, ensuring reliable and uninterrupted electricity supply for the people.

Kilembe Investment Limited is facing challenges related to power theft and vandalism that have impacted profitability. However, the company remains resilient and is taking proactive measures to address these issues, including collaboration with security agencies and seeking compensation for losses. The government is also committed to finding solutions and encouraging responsible electricity usage while penalizing acts of vandalism. This collective effort is crucial for the growth and development of the energy sector in Uganda.

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