Uganda’s Utilities 2.0 Model Shows How Collaboration Can Accelerate African Electrification

---

---

Last Updated on: 31st July 2025, 04:10 pm

By Power for All

A pilot project in rural Uganda demonstrates that utilities and mini-grid operators working together can deliver electricity 3.5 times faster than traditional approaches. At scale, this integrated model has the potential to reduce connection costs by up to 64% making electrification significantly more affordable.

With over 600 million people across Africa still lacking access to electricity, the continent faces one of the world’s most pressing development challenges: securing adequate reliable, affordable energy for economic growth, job creation, healthcare, education, and clean water access. Despite decades of investment and numerous initiatives, electrification rates have struggled to keep pace with population growth, leaving entire communities trapped in energy poverty and economic potential unrealized.

In Uganda, the challenge is stark. Approximately 23 million people, about half of the population, remain unconnected to electricity. In rural areas, access drops even further, and even where connections exist, outages are frequent and costly. Productive use of energy, a key driver of economic transformation, remains low.

Part of the problem lies in how electrification has traditionally been approached. National utilities and decentralized renewable energy (DRE) providers have largely operated in silos—competing for limited funding, duplicating infrastructure, and missing opportunities to align on shared goals. This fragmentation has made it hard to reach underserved communities cost-effectively. Extending the grid to these areas involves high capital costs, sparse customer bases, and low consumption—challenges utilities with tight budgets can’t easily overcome. Meanwhile, DRE companies often lack the regulatory support or scale to go beyond isolated pockets of service.

To break through these barriers, Uganda piloted a bold alternative.

The Utilities 2.0 Model

Launched in 2021, the Utilities 2.0 initiative is a first-of-its-kind partnership between centralized utilities and DRE providers. 

Convened by Power for All, a global campaign working to end energy poverty, in partnership with Uganda’s national utility Umeme, mini-grid developer Equatorial Power, and productive use of energy partners Energrow and East African Power—with the support of the Rockefeller Foundation and the Global Energy Alliance for People and Planet (GEAPP)—the pilot brought together regulators, funders, and policymakers to address the systemic barriers that have traditionally prevented coordinated electrification efforts. Rather than seeing utilities and mini-grid operators as competitors, Utilities 2.0 explored how they can collaborate to connect more people, more quickly, and more sustainably.

The pilot took place in Kiwumu, a peri-urban community where grid extension had long been planned but not yet implemented. A solar mini-grid and smart distribution network were rapidly deployed, electrifying 92% of households within six months. As demand grew, the site was interconnected with the main grid, and the mini-grid was redeployed to a new off-grid area—showcasing a dynamic, modular approach that meets people’s energy needs now, while aligning with long-term grid plans.

Results That Redefine What’s Possible

The impact was extraordinary. In weeks, 370 households gained power—3.5 times faster than traditional grid timelines. Monthly electricity consumption soared to 2,765 kWh, 30 times more than comparable grid-connected communities, as homes and businesses moved quickly up the energy ladder—from basic lighting to productive uses like refrigeration, maize milling, drying, and small-scale manufacturing.

Costs were also slashed. The average cost to connect each home and business dropped by 15.4% (from $1,213 to $1,026). Pre-paid smart metering halved distribution losses. And critically, customer lifetime value rose by more than 400%, making all electrification more financially attractive to both public and private investors.

A Blueprint for Scale

Scaling this approach across Uganda could provide 1.5 million new electricity connections by 2030—representing 14% of the total needed connections—while adding 70MW of renewable energy capacity. It would cut investment costs by 30%, reduce household connection costs by 64%, and expand the mini-grid market share from 100,000 to 1.5 million connections. For a country with over 23 million people still unconnected, these numbers represent a significant leap toward universal energy access.

Key enablers for scale include:

• Joint planning between utilities and mini-grid developers to map demand and deploy least-cost solutions.
• Blended financing models that de-risk private capital while leveraging utility stability.
• Regulatory innovation to enable interconnection, tariff alignment, and asset portability.
• Smart technology to track usage, reduce losses, and improve customer experience.
• Support for productive use to grow local economies and boost energy demand.

Regional Momentum

With the African Development Bank and World Bank leading Mission 300, an ambitious initiative to connect 300 million people to electricity across sub-Saharan Africa by 2030, partners have pledged more than $50 billion to accelerate progress. Models like Utilities 2.0 offer a proven, cost-effective pathway to help achieve these goals by fostering collaboration between national utilities, decentralized energy providers, and regulators, accelerating electrification across the region.

The Time for Integration Is Now

The Kiwumu pilot was never intended as a one-off. From the start, it was designed to prove the power of coordinated, public-private innovation—demonstrating how integrated supply- and demand-side interventions can accelerate electrification, reduce costs, and deliver stronger returns when aligned under a shared strategy, setting a new benchmark for what’s possible in achieving universal access and ambitious commitments like Mission 300.