In April 2026, Uganda’s energy sector is reaping the rewards of the bold legislative reforms initiated by the Electricity (Amendment) Act 2022. Having moved from a deficit to a surplus generation capacity, the country’s regulatory focus has shifted entirely toward demand stimulation and industrial competitiveness.
The Electricity Regulatory Authority (ERA) has spent the last year fine-tuning the rules that allow generators to sell power directly to large-scale consumers, bypassing the traditional distribution network.
The Impact of Direct Supply to Industrial Parks
The “Direct Supply” regulation is now fully operational in several key industrial zones, including Namanve and Mbale. By allowing generators like the Uganda Electricity Generation Company Limited (UEGCL) to sign Power Purchase Agreements (PPAs) directly with manufacturers, the cost of electricity for industry has dropped by nearly 25% compared to 2022 levels.
This has made Uganda one of the most attractive destinations for energy-intensive manufacturing in East Africa, fulfilling a core objective of the government’s Vision 2040.
Net Metering and the Decentralized Revolution
Another significant development in 2026 is the widespread adoption of Net Metering. Under the new ERA regulations, commercial and industrial (C&I) entities that have installed their own solar arrays can now “bank” excess energy with the grid.
This has led to a surge in private investment in rooftop solar, as businesses can now offset their nighttime consumption with daytime production. The ERA has also introduced three-year installation permits for electrical contractors, streamlining the process for decentralized energy projects.
Strengthening Oversight and Efficiency
| Regulatory Feature (2026) | Impact on Uganda’s Economy |
| Direct Supply | Lowered industrial tariffs to ~$0.05 per kWh for bulk users. |
| Net Metering | Accelerated C&I solar adoption by 40% year-on-year. |
| Installation Permits | Reduced licensing lead times from 6 months to 4 weeks. |
| Base Tariff Stability | ERA maintained stable base tariffs for Q1 2026. |
To protect the integrity of the new market, the 2022 Act’s provisions on vandalism and power theft have been strictly enforced. In 2026, the ERA reported a significant decrease in non-technical losses, thanks to a combination of stiffer legal penalties and the rollout of smart metering technology across the country.
Furthermore, the Minister of Energy’s expanded oversight powers have allowed for faster decision-making on regional interconnection projects, enabling Uganda to export its surplus power to neighboring Kenya and South Sudan more efficiently.
Uganda’s regulatory landscape in April 2026 is a model of how a “surplus” economy can use policy to drive industrial growth. By prioritizing direct supply and decentralized renewables, the country has turned its energy assets into a powerful engine for national development.
By Thuita Gatero, Managing Editor, Africa Digest News. He specializes in conversations around data centers, AI, cloud infrastructure, and energy.
