Umeme Ltd, the electricity supply and distribution company, finally handed over the assets it operated to Uganda Electricity Distribution Company Ltd (UEDCL) on Monday, March 31, 2025.
The event that happened about eight hours before the end of the 20-year concession at midnight, caused some public anxiety, with some doubts about it happening due to disagreements over the compensation amounts to Umeme’s unrecovered investments.
This eased when Umeme Ltd Board Chair, Patrick Bitature, revealed that the government had already given them the 118.4 million Dollars (433.4 billion Shillings) that the Auditor General had verified and approved.
In his concession statement, Bitature said they were handing over the assets “with a smile”.
Umeme had indicated that they were demanding about 243 million dollars according to their own assessment (about 856 billion Shillings), which was less than half of what the company had expected.
The company earlier said in a statement that they had been compelled by the government to hand over the system, but that the Board remained committed to ensuring an accurate and appropriate return for its shareholders and was “optimistic” that the matters in dispute would be resolved during the ensuing 30-day good-faith negotiations period or, in any event, subsequently by an arbitral tribunal in London.”
The AG’s report also noted that there was another 9.78 Million Dollars (35.8 Billion Shillings) still undergoing verification.
Ruth Nankabirwa, the Minister for Energy and Mineral Development, explained that Umeme and the government still had a month to harmonize the figures as per the provisions of the license.
She said the government could not come up with a concrete figure before, including the amount to ask for from the Ministry of Finance, Planning and Economic Development, because Umeme was still spending and collecting revenues.
A week before, the ministry asked for 191 million dollars for the buyout and Parliament granted the request by the Ministry of Finance, Planning and Economic Development for a loan to that tune.
“So, we were working with estimates because we could not tell exactly how much would have been spent and unclaimed by midnight of March 31,” she said and added, “and we could not wait until the end of the concession, because the law provides for a buyout before the assets are repossessed by the government
She said all this was being done to ensure that the switch to UEDCL would be smooth with minimal service disruptions.
The state-owned agency inherits a business worth 700 million dollars in revenues per year, according to Umeme Managing Director Selestino Babungi.
At the beginning of the concession, Umeme had been tasked with investing 65 million dollars in the first five years of their tenure, but it boasts of having invested 850 million in the sector to-date.
Some of the investments that have been made by Umeme include increasing the transformer zones from 5,000 to 17, 0000, while connections grew from 40,000 to 2.2 million. Babungi added that the total distribution network was now 44,000 kilometers.
Energy losses, he said, had been reduced from 38 percent of the total energy released by Umeme, to 16 percent, and asked UEDCL to work towards further reductions in the losses.
Another performance achievement was the electricity distribution efficiency from a time when for every 100 units got from Transmission only 50 percent would be transformed into cash, to today, when this has risen to 84 percent.
Explaining the supply stability challenge, Babungi said the demand for electricity was growing very fast and that Umeme was being forced to load energy on the infrastructure above the available capacity, hence the disruptions.
The power carried to the system has grown by 70 percent over the last five years, which calls for more investments in the distribution network.
“My main worry is that the demand for power is growing very fast and, within three years, the available capacity could be outstripped by the demand,” Babungi said.
Eng. Irene Bateebe, the Permanent Secretary at the Ministry of Energy and Mineral Development, assured the public that UEDCL had been prepared to be able to handle the task, and that the ministry would always support it.
She gave the example of the 50 Million Dollars that the government had secured to boost UEDCL’s capacity as it took over the network.
Bateebe says that the Ministry has also given Key Performance Indicators to UEDCL to guide its performance, adding that should they fail to meet the targets, there would be penalties.
On the growing demand, Minister Nankabirwa said the government was continuing to invest in generation, citing the already issues calling for expression of interest in the feasibility study for the 400-megawatt Kiba Hydropower Plant in Nwoya District on the River Nile.
Currently, Uganda’s installed generation capacity is 2040 megawatts against a demand of about 1,400, which has doubled over the last five years.
On the existing employees of Umeme, Paul Mwesigwa, the Managing Director, UEDCL, said the transition process approved 2912 positions and that 99.6 percent of these had been settled, and the other 12 positions were being handled.