By Aggrey Baba
When the lights dimmed on Umeme’s two-decade role as Uganda’s electricity distributor on March 31, 2025, the official handover was wrapped in ceremony,bbut beneath the surface, several critical questions still flicker unanswered.
While the Government paid Umeme a buyout package of $118 million (approximately UGX 452 billion), down from the company’s earlier demand of UGX 855 billion, the unexplained reduction in the figure has raised eyebrows.
Despite the Auditor General’s verification, stakeholders and observers continue to ask: How was this figure reached, and what was left out of the final negotiation?
According to New vision’s Mary Karugaba, more puzzling is the silence surrounding Umeme’s substantial outstanding debt to Uganda Electricity Transmission Company Limited (UETCL), reported by the Auditor General as UGX 542.8 billion. As of March 21, 2025, that amount remained unpaid, with no indication that the Government pressured Umeme to settle before its exit.
Finance Ministry officials have downplayed the urgency, citing ongoing reconciliation between the entities. Jenkins Miiro, UETCL’s Acting Head of Commercial Services, confirmed negotiations are ongoing, but a timeline remains elusive.
Further scrutiny reveals that Umeme was incorporated just 11 days before signing the concession agreement in 2004. This unusual sequence of events has prompted criticism, with MPs questioning how a company still wet behind the ears secured such a vital national contract.
During the final parliamentary debate on the buyout, opposition legislators including Joel Ssenyonyi and Dennis Oguzu Lee highlighted what they called a manufactured urgency. They argue that despite the Government knowing Umeme’s concession would end in 2025, the decision-making was rushed and opaque, with documents shared with Parliament only days before approval was required.
If Umeme disputes the final buyout sum, arbitration awaits in London under the United Nations Commission on International Trade Law.
However, the company has yet to reveal its next move, only stating it will respond after internal review. Under Section 9.3 of the support agreement, each party would bear its own legal costs in arbitration.
Meanwhile, the mystery surrounding the escrow account, originally set up to monitor Umeme’s investments, deepens.
Legislators revealed that by December 31, 2024, the account held a meager $23,835 and UGX 16.8 million. Sources indicated that no substantial deposits were made after 2015, despite its critical role in the oversight of rental income and investment tracking.
Equally controversial is the ownership trail of Umeme’s early years. Parliament previously discovered inconsistencies in the records of founding shareholders Eskom and Globeleq.
Despite controlling 44% and 56% respectively, no evidence was provided to show the companies registered their interests with the Uganda Registration Services Bureau or paid capital gains tax during share transfers, raising concerns of potential revenue loss for the country.
In contrast, Uganda’s oil sector saw Heritage compelled to pay UGX 1.46 trillion in capital gains tax when exiting its local stake, prompting MPs to question why Umeme’s transactions were treated differently.
As Umeme retreats from Uganda’s energy stage, attention turns to its investors, including the National Social Security Fund, Allan Gray, Coronation Global Opportunities, and the International Finance Corporation. The company, still listed on the Uganda Securities Exchange and Nairobi Stock Exchange, is expected to announce a post-exit roadmap during its May 22 general meeting.
For now, Umeme’s exit raises more questions than answers, about ownership, financial transparency, and the Government’s ability to hold major players accountable.
As Uganda enters a new chapter in its power distribution journey, the lessons of the past 20 years loom large, demanding more clarity, scrutiny, and institutional memory than ever before. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
