UMEME Limited Chairman Patrick Bitature expressed disappointment with the government’s buyout offer, stating, “This is not what we expected.” The government has deposited over $120 million into UMEME’s account, following a special audit report by the Auditor General that reduced the anticipated buyout amount from $190 million to $118 million.
Background
The controversy surrounding UMEME’s buyout stems from a concession agreement between the government and UMEME, which was set to expire in March 2025. In December 2022, Bitature revealed that the government had decided not to renew UMEME’s concession, citing the need for a new national electricity company.
Key Issues
- Buyout Amount: The government’s offer of $118 million, as per the Auditor General’s report, is significantly lower than UMEME’s expected valuation.
- Concession Agreement: The agreement’s terms, including a 20% return on investment for UMEME, have been a point of contention.
- New National Electricity Company: The government plans to establish the Uganda National Electricity Company (UNECL), which will take over UMEME’s operations and assets.
Implications
The outcome of this dispute will have significant implications for UMEME’s employees, customers, and the broader energy sector in Uganda. The government’s decision to establish a new national electricity company aims to reduce expensive private capital in the sector and improve efficiency.
