By Spy Uganda
The Auditor General has urged Parliament to delay approval of a US$190 million (UGX 696.4 billion) loan from Stanbic Bank Uganda for the buyout of Umeme until an audit of the company’s submitted figures is complete.
Joseph Hirya, Director of Audit at the Office of the Auditor General, made the request while appearing before Parliament’s Committee on National Economy on March 18, 2025.
The call for a delay follows a statement by Ziria Tibalwa, Chief Executive Officer of the Electricity Regulatory Authority (ERA), who informed the committee that the estimated buyout amount stands at US$127 million, though the final figure is yet to be determined.
“Let us wait for the final figure from the Auditor General. We request a few more days—not beyond next week—to provide the actual figures we can defend. The Auditor General does not report on estimates. All reports submitted to Parliament go through a quality check and final review,” Hirya stated.
He cautioned that approving the loan prematurely could lead to unnecessary penalties and interest payments, adding, “It is better to pay interest on a loan based on actual figures.”
Government Readiness
During the same session, Tibalwa expressed doubts about the government’s preparedness to take over Umeme’s operations in April 2025. She pointed out delays in securing US$50 million needed for the Uganda Electricity Distribution Company Limited (UEDCL) to facilitate the transition.
She also attributed recent power outages to restrictive clauses in Umeme’s concession agreement, which bar government intervention until the contract expires. “We don’t even have the US$50 million for UEDCL to begin operations. Moreover, the concession agreement wouldn’t allow UEDCL to step in before its official end. This should be a learning experience for government—future contracts must have flexibility to allow early investment and collaboration.”
Tibalwa further questioned Umeme’s recent investments, suggesting that their last-minute efforts were due to the nature of the live electricity network. “If a transformer at Parliament blows today, do we wait until April 2025 for UEDCL to take over? In the past month, we’ve had serious outages due to vandalism and infrastructure failures. If Umeme were to halt operations completely, we would be in crisis.”
Job Losses in Transition
Meanwhile, the Umeme buyout was also a key topic in a separate meeting between officials from the Ministry of Energy and Mineral Development and Parliament’s Committee on Environment and Natural Resources.
Energy Minister Ruth Nankabirwa acknowledged that some Umeme employees would lose their jobs during the transition, as the government seeks to eliminate redundancy. “Umeme workers applied for positions, but their applications were rejected. The goal of restructuring is cost-saving and efficiency. If a role already exists within UEDCL, we cannot retain both employees. If we interview both the Umeme and UEDCL candidates, one is bound to lose.”
She also warned that the failure to secure US$50 million for UEDCL could cripple power distribution in Uganda. “UEDCL must have well-stocked stores, just like Umeme did, to respond swiftly to service demands. Without proper funding, the company will struggle to manage the electricity network, and I don’t want to be blamed for that.”
With Parliament yet to finalize the loan decision, the government faces mounting pressure to resolve financial and logistical challenges before the Umeme concession ends. The pending audit report will be critical in determining the way forward for Uganda’s electricity distribution sector.
