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By Elias Biryabarema
KAMPALA, July 6 (Reuters) - Uganda’s sole power distributor Umeme plans to list this year on the Uganda and Nairobi stock exchanges as it looks to raise capital to finance the country’s electricity network, its managing director said on Friday.
The company holds a 20-year electricity distribution concession in east Africa’s third-largest economy and is 100 percent owned by the pan-emerging markets private equity firm Actis.
Charles Chapman, managing director of Umeme, said the company opted for an initial public offering as the availability of electricity has increased and there was an agreement over regulatory targets.
Although the company has not finalised its plans for the IPO and would not comment on the amount of money it looks to raise, a source told Reuters it is likely to list 20 percent of its shares.
“The initial public offering (IPO) will support Umeme’s capital raising initiatives to finance the continued development of the electricity distribution network, including projects such as prepayment metering and energy loss reduction,” Chapman told Reuters.
Uganda suffers a chronic power supply crisis which has long distressed businesses, slowed economic growth and stymied development. The electricity deficit is estimated at around 130 megawatts.
However, the land-locked state is tackling the electricity shortage by building the Bujagali hydropower dam on the Nile river.
In February it added 50 megawatts to the grid after switching on five turbines but the 250-megawatts project is yet to be completed.
Constructed on the famous Bujagali falls, the dam is one of the largest energy infrastructure projects in east Africa and is expected to cost around $860 million.
“We believe that Umeme will be stronger, more transparent and accountable with the input of our customers and employees as shareholders,” Chapman said. (Writing by Drazen Jorgic; Editing by Mike Nesbit)