Grace Ashiru
The government of Uganda is going to invest $215 million to buy the majority of Umeme’s shares.
When Umeme’s 20-year deal ends in 2025, the government will fully control the power distribution system. This will end a long-standing arrangement between the private sector and the government.
The Permanent Secretary, Irene Bateebe, told the Committee of Environment and Natural Resources and the Ministry of Energy on Tuesday, April 11, 2023, that Uganda Electricity Distribution Company Limited (UEDCL) needs US$158 million to invest in the distribution system over the next three years.
This will bring the final buyout amount that Umeme has to pay down to US$7.1 million when the contract ends.
Bateebe said that the price to buy out the company was $215 million as of December 2022.
Umeme invests often, and ERA has a recovery mechanism where they can recoup some of this expenditure through the tariff. According to the agreement, UEDCL has the option to enter the market right away and make an investment in the Umeme concession and asset.
