Umeme challenges Govt's Shs478bn buyout, handover is today, arbitration in London

By:  Mzee Asingwire

Umeme Limited, Uganda’s largest electricity distributor, has raised concerns over the Government of Uganda’s final audit report, which puts the buyout amount at USD 118,385,603. The company, however, has accepted the sum while maintaining its objections. In a public notice released on March 30, 2025, Umeme confirmed that it had initially submitted an estimated buyout amount of USD 234 million, subject to a government audit. Following the audit by the Office of the Auditor General (OAG), the government indicated a buyout figure of just over 118 million dollars, with an additional cost of nearly USD 9.8 million still pending verification. [This brings the total to127 million US dollars, which is approximately 478.16 billion Ugandan Shillings.] Despite receiving the government’s admitted sum of USD 118 million, Umeme has disputed the figure provided in the OAG’s report. The company stated that it would formally notify the government of the dispute, in line with Section 9.1 of the Support Agreement. This disagreement comes as Umeme has been ordered to transfer the distribution system to the Uganda Electricity Distribution Company Ltd. The handover is set to take place on March 31, 2025. Umeme remains hopeful that the ongoing dispute will be resolved through a 30-day negotiation period. If the matter is not settled within that time frame, the company plans to seek resolution through an arbitration tribunal in London. The Board of Directors reassured shareholders and the public that they are committed to ensuring an accurate return for investors and will continue to follow the terms of the agreement while seeking a fair resolution. This announcement follows regulatory rules under the Uganda Securities Exchange Listing Rules of 2025, and the Capital Markets (Public Offers, Listings and Disclosures) Regulations of 2023 in Kenya.

Source: Pulse