Uganda Electricity Generation Company Limited (UEGCL) has reported a significant drop in profit for the 2024/25 financial year, reflecting the financial burden of the 600MW Karuma Hydropower Plant and broader operational pressures across its generation portfolio.
Profit after tax fell to Shs25.02 billion (approximately US$6.75m), less than half of the Shs54 billion (US$14.6m) recorded the previous year, despite a 40% rise in revenue to Shs492 billion (US$132.8m). The revenue increase was driven by strong hydropower dispatch and Karuma’s first full year of commercial operation, but rising operational costs, depreciation, and interest expenses tied to the project significantly eroded net earnings.
Financing costs on the government-on-lent Karuma loan, coupled with increased depreciation and general expenses, remained the largest drag on profitability. Return on assets improved slightly to 1.67% from 1.25%, but remains below industry averages, partly due to lower-than-expected output from some energy-based plants.
A major financial relief came through government intervention: the conversion of Shs566 billion (US$152.8m) in accumulated interest on the Karuma loan into equity. This boosted UEGCL’s equity position to Shs1.54 trillion (US$416.3m) and eased long-term solvency pressures. Total assets grew to Shs8.368 trillion (US$2.26bn), underscoring the capital-intensive nature of Uganda’s hydropower expansion.
Speaking at the 15th Annual General Meeting on December 4, CEO Harrison Mutikanga described the year as a turning point, driven by Karuma’s full integration into the grid. He said UEGCL remains aligned with national development priorities under Vision 2040, the Energy Policy 2023, and the Fourth National Development Plan. Strengthening financial sustainability through debt restructuring, revenue recovery, and cost control remains a central strategic goal.
Electricity output improved modestly, with generation rising 6.7% to 3.63 terawatt hours. Plant availability averaged 97.7%, and reliability stood at 99.6% across UEGCL’s four stations: Nalubaale–Kiira, Isimba, Namanve, and Karuma. Collectively, they account for 1,213MW, over 59% of Uganda’s installed grid capacity.
Energy Minister Ruth Nankabirwa acknowledged the utility’s solid performance but noted that Karuma’s dispatch remains constrained by weak industrial demand. Several industrial parks remain incomplete, limiting consumption and slowing the expected commercial absorption of new generation capacity.
Concerns over unresolved structural defects at the Isimba Hydropower Dam also resurfaced. Shareholders warned that delays by the contractor, China International Water and Electric Corporation, pose risks to asset safety and long-term value. Government has requested a detailed technical status report, with commitments to secure repair financing and enforce contractor accountability.
UEGCL is pushing ahead with diversification efforts, commissioning the 6.6MW Nyagak III plant in West Nile and completing feasibility studies for Uganda’s first floating solar project, a proposed 10MW installation on the Isimba reservoir. Rehabilitation works at Nalubaale–Kiira are also underway to extend the plants’ lifespan by more than 30 years.
Looking ahead, the company says profitability will hinge on stricter cost discipline, higher dispatch, improved revenue collection, and ongoing investment in renewables. While short-term financial pressures persist, UEGCL believes rising industrial consumption and continued government support will gradually stabilise earnings and reinforce the hydropower sector’s role in Uganda’s long-term energy security.
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