Power utility pays Uganda NSSF $1.3m in dividends.

By Estella Jones

KAMPALA, Uganda – The National Social Security Fund (NSSF) has received a cheque of Ush4.5 billion (nearly $1.3 million) from the power distributor, Umeme Limited, as gross dividends for its 231million shareholding in the company.

“The numbers tell the story; we invested a total of Ush70.2 billion in Umeme and have so far received Ush13.6 billion as dividends. As of June 30, the capital gains stood at Ush44.5 billion and the total value of our investment at Ush114.7 billion. By any measure, a 83% return since we invested in Umeme, is outstanding,” Richard Byarugaba, the Managing Director NSSF said last week.

NSSF is the third largest institutional investor behind South African-based Investec Funds and UK’s’ Actis in the electricity distributor.

Last year, NSSF bought an additional 100 million shares in the company last year, which increased its takes to 14.27%.

Byarugaba said NSSF’s investment strategy is finding paying dividends and Umeme is acting as a good example.

The Umeme Managing Director, Selestino Babungi said, the energy sector still has considerable potential.

“Only 15% of Ugandans are covered by the national grid. Umeme will improve electricity access in tandem with the government’s vision to have up to 40% of the country covered by 2040. This will require heavy investments in infrastructure development, technology innovations, human resources and top-notch customer care services which will ultimately ensure good shareholder value,” Babungi said.

Byarugaba said the Fund will continue to seek opportunities in equities in Uganda and within the East Africa as it reduces concentration on fixed income investments.

“Increasing our exposure to the equities offers us an opportunity for diversification hence enabling us to get good returns from the fast companies. This money will be transferred to our customers as interest and they can expect a bigger percentage interest from their money.”

Umeme’s performance in 2014 was underpinned by capital investments, increase in sales and improved performance against regulatory targets.

Babungi repeated the company’s commitment to bringing energy losses down further having achieved 18.7% in 2015 from last year’s 21.3% and investment in appropriate technology to improve customer service delivery.

“We have converted over 30% of our total customers to the payments metering system and we have commenced upcountry conversions across the country since October 2014. This dividend payment is going directly to NSSF.

“We want to thank all the investors in the company, individuals and privates who bought shares in Umeme Limited right from the initial public offering and over the last couple of years as they recognised the opportunity for what it is,” he said.