Kampala, 30th March 2025 – Power distributor Umeme Limited has announced that it has been compelled by the Government of Uganda to hand over its electricity distribution system to the Uganda Electricity Distribution Company Ltd (UEDCL) on Monday, 31st March 2025. The company, however, disputes the government’s final buy-out valuation and plans to challenge it.
In a public notice issued by the company’s Board of Directors, Umeme revealed that it had initially estimated a buy-out amount of USD 234 million, a figure that was subject to government audit and reconciliation. However, following an audit by the Office of the Auditor General (OAG), the Government of Uganda issued a final report to Parliament on 27th March 2025, declaring a revised buy-out sum of USD 118,385,603. Additionally, the government excluded costs amounting to USD 9,785,298, pending verification.
While acknowledging receipt of the USD 118.4 million, Umeme insists that it is disputing the OAG’s final audit figure and has officially informed the government that it will issue a formal Notice of Dispute in accordance with the terms of its Support Agreement. The company maintains that an accurate and fair valuation should be ensured to guarantee appropriate returns for its shareholders.
Despite these disagreements, Umeme confirmed that it would comply with the government’s directive and proceed with the handover to UEDCL as scheduled. The company remains optimistic that the dispute will be resolved within the ensuing 30-day negotiation period or, if necessary, through arbitration in London.
The announcement was made in compliance with Rule 36 of the Uganda Securities Exchange Listing Rules, 2025, and Regulation 89 of the Capital Markets (Public Offers, Listings, and Disclosures) Regulations 2023 of Kenya.
The handover of Umeme’s operations is slated for today 31st March 2025 at Lugogo UMEME Head Office, and marks a significant transition in Uganda’s electricity distribution sector, with the government taking full control as part of its broader strategy to manage energy distribution directly.
Background
Umeme Limited has been Uganda’s main electricity distributor, operating under a 20-year concession agreement that was set to expire in 2025. The company had long expressed its willingness to exit, subject to a fair buy-out settlement. The final stages of this transition, however, have been clouded by financial disputes, with the company asserting that it is owed additional sums.
The government, through UEDCL, will now take over the distribution network, paving the way for what is expected to be a new era of publicly managed electricity supply in Uganda.
