By Spy Uganda
The government is seeking parliamentary approval to borrow US$190,988,556 (Shs697.788 billion) from Stanbic Bank to facilitate the buyout of Umeme Limited.
The request was tabled by Henry Musasizi, Minister of State for Finance, during the plenary sitting on February 18, 2025. Speaker Anita Among subsequently referred the proposal to the Committee on National Economy for scrutiny before a final decision is made.
This development comes as the government races to secure funds to buy out Umeme’s investments in Uganda, following its decision not to extend Umeme’s concession. Instead, the Uganda Electricity Distribution Company Limited (UEDCL) will take over Umeme’s mandate effective April 1, 2025, when the current concession expires.
According to the Committee on Environment and Natural Resources’ 2025/26 Budget Framework Paper report, Umeme had recovered a total investment of US$608.603 million (UGX2.223 trillion) as of December 31, 2024. However, the total unrecovered and verified amount stands at US$90.064 million (UGX329.072 billion), according to the regulator.
Parliament was also informed that Umeme’s complete and verified investments as of December 31, 2023, amounted to US$698.7 million (UGX2.552 trillion). Additionally, the company submitted a request for verification of an extra US$53.8 million (UGX196.561 billion) in investments, in accordance with the Electricity Authority Guidelines. Another investment estimated at US$35 million for 2024 and 2025 remains pending verification. The Auditor General is currently finalizing the audit of the UEDCL buyout amount.
Parliament recommended strengthening UEDCL’s capacity as it prepares to take over five electricity distribution concessions, including Umeme Limited, Pader-Abim Community Multi-purpose Electricity Cooperative Society, Kyegegwa Rural Electricity Cooperative Society, Kilembe Investments Limited, and Ferdsult Engineering Services Ltd.
“The successor of Umeme Limited should be equipped with long-term financing in the form of non-commercial loans to rehabilitate, expand, and modernize the electricity distribution network, similar to the support provided to UETCL, the Uganda Civil Aviation Authority, and the National Water and Sewerage Corporation. This would lead to a significant reduction in end-user tariffs and improved reliability of supply to connected customers,” the report stated in part.
Parliament further urged the Minister of Energy to ensure that all qualified Ugandan staff currently employed by Umeme are seamlessly absorbed by UEDCL in a fair and transparent process.
The loan request comes at a time when Uganda’s public debt is on the rise. According to a statement from the Accountant General attached to the December 2024 Audit Report, the country’s debt increased from UGX97.5 trillion in June 2023 to UGX109.8 trillion by June 2024. This mounting debt burden has raised concerns about Uganda’s financial sustainability.
