Minister of Energy and Mineral Development Ruth Nankabirwa has reaffirmed the government’s commitment to paying only the $118 million (UGX 430 billion) buyout amount determined by the Auditor General for electricity distributor Umeme, setting the stage for a potential showdown as the company demands a higher payout.
Speaking on Thursday, Nankabirwa confirmed that the government had received the Auditor General’s report and would strictly follow the independent assessment despite Umeme’s claims.
“We as Government are in receipt of this from Umeme Ltd,” she said, referencing the special audit findings.
The Auditor General’s report pegs the buyout amount at $118 million—significantly lower than the $190 million (UGX 700 billion) previously approved and far below the $234 million Umeme had initially demanded.
The significant gap between Umeme’s valuation and the Auditor General’s figure has raised concerns about a potential impasse as the two parties work toward finalizing the buyout.
Nankabirwa emphasized that while the government remains open to dialogue, it will not deviate from the Auditor General’s valuation. “The Auditor General has audited and determined $118 million as the buyout amount,” she asserted.
The 20-year concession agreement between Umeme and the government is set to expire on February 28, 2025, and the buyout amount must be paid within 30 days, with a deadline of March 31, 2025. Any delay could expose the government to penalty interest under the terms of the agreement.
Minister Nankabirwa acknowledged Umeme’s right to contest the Auditor General’s valuation but remained firm on the government’s position. “We expect by 1st April to have handed over… UmemeLtd is free to petition!” she stated.
Umeme, however, has indicated that it will only transfer the electricity distribution system once the agreed buyout amount is paid in full, raising the possibility of a legal battle if the dispute is not resolved.
The buyout negotiations have sparked additional scrutiny after revelations that the Auditor General’s report was not fully disclosed to Parliament before it was adopted—raising questions about transparency in the process.
The government’s stance suggests a hardline approach to controlling public expenditure, while Umeme’s insistence on a higher payout reflects broader concerns about corporate interests and compensation at the end of major public-private partnerships.
With the clock ticking toward the concession’s expiration, both parties face mounting pressure to resolve the dispute—or risk plunging Uganda’s power sector into further uncertainty.
