Uganda’s Electricity Tariffs Set to Drop in January: A 5.2% Reduction Announced by ERA

Starting in January 2025, Ugandans will experience a significant reduction in electricity tariffs, as the Electricity Regulatory Authority (ERA) has confirmed a 5.2% cut across most consumer categories for the first quarter of the year.

This adjustment will take effect from January through March. Dr. Sarah Kanaabi Wasagali, Chairperson of the ERA, made the announcement today at Uganda Media Center, explaining that the price reduction will have substantial benefits for households and businesses alike. Under the new rates, domestic consumers will see their electricity costs drop from shs 803.0 to shs 606.2 per unit, while commercial customers will pay shs 575.2 per unit, down from shs 606.2.

For industrial consumers, the tariff changes will vary according to the size and type of operation. Medium-sized manufacturers will be charged shs 417.8 per unit, and large manufacturing industries will benefit from an even lower rate of shs 351.5. Those in the service sector will now pay shs 367.1 per unit, while extra-large industries will see the most significant reduction, with their rate dropping to shs 299.1 per unit. Public amenities, including street lighting and hospitals, will have their tariff set at shs 360.0 per unit.

The ERA’s decision to implement these price cuts will result in a saving of approximately shs 155 billion in electricity delivery costs. Dr. Wasagali attributed the reduction to several key factors, including the expected annual growth in electricity demand, projected at 10.4%. This surge in demand is expected to coincide with an increase in energy purchased by the Uganda Electricity Transmission Company Limited (UETCL).

She further explained that the phasing out of Umeme Limited’s concession agreement, set to conclude on March 31, 2025, would contribute to the tariff reductions. Additionally, the full commissioning of the Karuma Hydropower Plant is expected to add a significant volume of energy to the national grid, further reducing costs in the long term.

ERA will continue to review and adjust tariffs on a quarterly basis, taking into account factors such as inflation, exchange rate fluctuations, international fuel prices, and other related costs. Dr. Wasagali also outlined a shift in tariff categories moving forward, including the creation of a combined public amenities category, which will now encompass both street lighting and public hospitals.

In an effort to further refine the industrial tariff structure, medium and large industrial consumers will be split into distinct categories for manufacturing and service-based industries. Additionally, large and extra-large industries will continue to benefit from the declining block tariff structure, which offers lower rates as consumption increases. The domestic cooking tariff, set at shs 412 per unit, will apply to households consuming between 81 and 150 kWh per month.

Minister for Energy Ruth Nankabirwa praised the tariff reduction, emphasizing the government’s commitment to lowering the cost of electricity for Ugandans. She noted that the decision would help stimulate industrial growth, promote socio-economic development, and improve the well-being of citizens.

“The reduction not only saves the sector, the end-user consumer, and the economy shs 155 billion, but it also reflects the government’s dedication to making electricity more affordable, thereby supporting industrialization and driving transformation in Uganda,” Nankabirwa said.

She also commended ERA for introducing a specialized public amenities tariff, which will directly benefit key public institutions such as referral hospitals, helping to reduce their operational costs.

The new tariffs are seen as a major step forward in Uganda’s ongoing efforts to make electricity more affordable, bolster economic growth, and ensure access to essential services. As the country moves closer to meeting its long-term energy goals, the adjustments are expected to have a positive impact on both the consumer and the broader economy.