Overview:
Uganda seeks $100-150 million to buy out electricity distributor Umeme as 20-year concession ends, amid efforts to revamp energy sector
KAMPALA, Uganda — The Ugandan government is seeking financing to buy out the country’s main electricity distributor, Umeme, as its 20-year concession nears its end.
The government needs to secure between $100 million and $150 million to complete the buyout by March 30, 2025. The Ministry of Finance is currently awaiting the outcome of an audit into Umeme’s investments to determine the final amount.
“We are looking for the buyout amount. The Auditor General has to give us the final figure,” said Moses Kaggwa, acting director of economic affairs at the Ministry of Finance. “We hope it will come through by the end of this month.”
Government officials say they are actively seeking a financier to fund the buyout. The Ministry of Energy and the Ministry of Finance are working together to mobilize the necessary funds.
Umeme’s concession agreement requires the government to pay the company for its investments, which have increased over the years. The government’s buyout of Umeme is expected to be completed by the end of March 2025. If the payment is delayed, interest will apply.
The government had initially estimated the buyout amount to be around $250 million. However, officials now predict that the final amount will be lower, between $100 million and $150 million.
“The current buyout is going to be less than $250 million. We anticipate this figure to be between $100 million and $150 million or slightly above,” said Energy State Minister Sidronius Okaasai Opolot.
As the concession end nears, the government has initiated the handover of Umeme’s assets to the Uganda Electricity Distribution Company Limited. The recruitment process to revamp the company is also underway.