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Umeme Hands Over Power as Buyout Dispute Escalates
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Kenyan Wall Street
April 01, 2025
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What's Inside
The Power is No Longer Umeme’s
On Monday, Umeme Limited disputed the US$118 million it received in the buyout from the Uganda government, as the 20-year concession ended and the listed utility company handed over operations.
Both the Uganda Securities Exchange (USE) and the Nairobi Securities Exchange (NSE) have suspended trading of the Umeme counter “in the interest of investor protection and maintaining transparency of the market” for two weeks.
In 2024, Uganda said it is considering power companies to enable them to get access to more capital.
At midnight on March 31st, the Uganda Electricity Distribution Company Limited took over operations. UECDL has said it will invest US$50 million to boost operations.
“Umeme disputes, among several things, the audited figure in the OAG’s Report and has informed the Government of Uganda, that the company will issue a formal notice of Dispute,” the company’s Board said in a notice.
In two decades, Umeme grew the country’s power distribution network and customer numbers, with the latter growing by 10*.
The second is the last stages of the buyout process, which has seen different valuations from Umeme and the government. The terms of the concession require Kampala to reimburse the power utility company for unrecovered capital investments.
The company invested Us$832 million and has recovered around US$680 million. Umeme claimed more than US$230 million, the Energy ministry’s countered with US$191 million, and the Auditor-General made a preliminary estimate of US$201 million.
The company received US$127 million, with a first instalment of US$118 million and US$9 million to be paid once ongoing projects are complete.
The dispute over different valuations may end up in a prolonged legal process, which would ultimately hurt investor confidence especially in capital-intensive public good projects.
Stay updated on this and other important news on The Kenyan Wall Street.
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