Umeme cut Uganda's power losses with prepaid meters

When Uganda privatized its power distribution in 2005, the network was bleeding: distribution losses ran near 35%, and unpaid bills and theft starved the utility of cash to maintain the grid, so reliability and revenue fed each other downward.

Umeme's answer was to change when payment happened. In December 2010 it retrofitted 8,600 domestic post-paid meters with prepaid meters at about $3.5 million; the pilot worked, and prepayment rolled out across the customer base. Large industrial users — 0.5% of customers but over 70% of revenue — got automated meter reading instead.

Prepayment turned collection into a purchase: no meter-reading, no bill delivery, no disconnection fights, no security deposits — about $36 saved per customer in operating costs — while automated reading recovered 45 GWh worth about $6 million from large users and cut their billing cycle from 14 to 6 days.

By 2017 Umeme had cut distribution losses from 35% around 2008 to 19%, and the World Bank's 39-utility study found Uganda was one of only two countries whose utility covered both operational and capital costs. Customers grew to 1.4 million with losses at 16.6% by 2019, as prepaid metering passed one million meters.