The Government of Uganda and Umeme Limited are locked in a standoff over the final buyout amount due to the electricity distribution company ahead of its concession expiry on March 31, 2025.
The dispute comes at a time when the country is facing significant power supply constraints, further intensifying public scrutiny of the ongoing energy sector transition.
Energy Minister Ruth Nankabirwa on Wednesday reaffirmed the government’s position that it will only honour the USD 118 million figure audited and confirmed by the Office of the Auditor General (OAG).
“We, as a Government, are in receipt of this from Umeme Limited. As the government of Uganda, we shall ONLY execute what the Auditor General has audited, which is $118M,” she stated on the social media platform X.
She added that Umeme is “free to petition” but insisted the company must hand over its operations to the Uganda Electricity Distribution Company Limited (UEDCL) by April 1, 2025.
“I implore Umeme Limited as the main distributor to minimise outages as they remain under concession until 1st April 2025,” Nankabirwa noted, referencing the country’s recent power instability.
However, Umeme has contested this amount, earlier estimating a buyout figure of USD 234 million, and expressing readiness to review the Auditor General’s findings before determining its next steps.
In a public notice on March 26, Umeme clarified that the rights to operate the Distribution System would only terminate upon receipt of the agreed-upon Buy Out Amount. If not paid by March 31, 2025, Umeme reserves the right to apply penal interest, as per the concession agreements.
Fierce Parliament Debate
The Auditor General’s special report has now sparked fierce debate in Parliament. Deputy Speaker Thomas Tayebwa urged lawmakers to approve the OAG report, warning that failure to resolve the matter by March 31 could allow Umeme to levy penalties on the government.
“If we don’t settle by that timeline, Umeme will get a blank check to start tripling interest and penalty, so you don’t have much,” Tayebwa told MPs before adjourning the House.
But the call for expedited approval drew stiff resistance from opposition lawmakers. Leader of Opposition Joel Ssenyonyi questioned the integrity of approving a report unseen by MPs.
“We appropriated US$190 million, now we are being told the figure is US$118 million. Are we handing over our appropriation role to the Government?” he asked, calling for full parliamentary scrutiny.
Kira Municipality MP Ibrahim Ssemujju Nganda echoed the sentiment, stressing that Parliament had never passed an Auditor General’s report without examining it. “This will be the first time in the modern history of Parliament,” he warned.
Meanwhile, UEDCL has confirmed it will officially assume full control of electricity distribution operations across Uganda, effective April 1, under ERA Licenses No. ERA/LUC/DIS/024/231 & ERA/LIC/DIS/024/232. The company has assured customers of uninterrupted services and warned the public against scams during the transition period.
The transition unfolds against a backdrop of ongoing nationwide power outages. The Ministry of Energy and Mineral Development attributed the disruptions to overloaded substations, vandalism, equipment failures, and bushfires damaging transmission infrastructure. It pledged swift maintenance and upgrades to ensure reliability.
“This transition is critical to Uganda’s energy future. We urge citizens to refrain from vandalism and activities that threaten the national grid.”
As the clock ticks down to April 1, all eyes remain on whether the government and Umeme can reach a resolution that avoids costly penalties, restores energy stability, and ensures a smooth transition to public electricity distribution.
