Uganda’s leading electricity distributor, Umeme Limited, has officially ended its 20-year concession agreement for electricity distribution, marking a significant transition in the country’s power sector.
The concession, which expired on February 28, 2025, has now entered the Retransfer Transition Period.
According to an official public notice released by Umeme, the company’s rights to the distribution system will only terminate once the Government of Uganda pays the Buy Out Amount.
The government, through the Office of the Auditor General, is currently auditing the estimated Buy Out Amount of USD 234 million submitted by Umeme.
The audit process remains ongoing, and the company awaits the final reconciliation report.
Payment Deadline Approaching
The Government of Uganda is required to settle the Buy Out Amount within 30 days of the concession’s expiry, with a firm deadline set for March 31, 2025.
If the payment is not made by this date, penal interest will be applied as stipulated in the concession agreements.
Financial and Shareholder Implications
Umeme has acknowledged that the pending Buy Out Amount has delayed the finalization and publication of its financial statements.
Once the audit process is complete, the company will update its shareholders on any necessary actions. Additionally, these matters will be addressed at the upcoming Annual General Meeting (AGM), scheduled for May 22, 2025.
Transition of the Distribution System
As per the concession agreements, Umeme will only retransfer the electricity distribution system to Uganda Electricity Distribution Company Limited (UEDCL) or its designated nominee after receiving the Buy Out Amount.
Commitment to Compliance
Despite the transition, Umeme has reassured stakeholders of its commitment to meeting all regulatory and listing obligations under the Uganda Securities Exchange Rules.
This development marks a crucial phase for Uganda’s electricity sector, with stakeholders keenly watching how the transition unfolds and the impact it will have on power distribution in the country.
