Umeme takeover: Govt in advanced stages to secure sh180b

KAMPALA - The energy ministry has reaffirmed the Government’s full readiness to take over the electricity distribution concession from Umeme Ltd on April 1, 2025.

The Government will take over the concession through its agency, the Uganda Electricity Distribution Company Limited (UEDCL).

A statement by the ministry released on Wednesday, March 19, 2025, that the finance ministry was in the advanced stages of securing $50m (about shillings 182 billion) through internal borrowing to support UEDCL capital investments.

“By the end of next week, these funds will be available to ensure that UEDCL is financially equipped to improve the quality of service,” it said.

It also said additionally, approval of the buyout amount by Parliament was in advanced stages to support the timely payment of Umeme.

“The buyout amount is a claim by Umeme for capital investments made and not recovered by the end of the concession. This further confirms the Government’s unwavering commitment to honouring its contractual obligations while ensuring a smooth transition in the electricity distribution sector,” the statement said.

Regarding staffing concerns, the ministry emphasised that the restructuring process by UEDCL aims to enhance efficiency, avoid duplication of roles and ensure cost-effectiveness in electricity distribution.

It noted that the recruitment process has been fair, transparent, and merit-based, ensuring that the best-qualified personnel are retained while prioritising operational efficiency.

“The ministry takes note of the current power reliability challenges and has required Umeme to continue fulfilling its contractual obligations till the end of March 2025 while preparing UEDCL to ensure immediate corrective measures after 1st April 2025,” it said.

Energy minister Ruth Nankabirwa said in December 2022 that the electricity distribution network under Umeme covered a large percentage of the country, had grown in asset capacity and complexity and it employed about 2,000 staff.

Umeme’s total investments made since 2005—as of December 2021—stood at $547.5m with a recovery of $331.94m.

The decision not to renew its 20-year concession notwithstanding, Umeme said in 2022 that it remained committed to performing its obligations as per the existing concession and would continue to operate and maintain the electricity distribution system in line with prudent utility practice to ensure continued service delivery.