Umeme Limited, Uganda’s largest electricity distribution company, has formally declared a dispute with the Government of Uganda over the buyout amount stipulated in their existing concession agreements.
The announcement, issued by the company’s Board of Directors, signals the start of a potentially high-stakes negotiation that could impact the company’s future and investor confidence.
In a notice released on Monday, Umeme Limited confirmed that it had served a Notice of Dispute to the Government of Uganda, represented by the Ministry of Finance, Planning, and Economic Development.
The notice was delivered on April 11, 2025, in line with the terms set out in the Support and Concession Agreements signed between the company and the government.
At the heart of the dispute is the Buyout Amount—a financial compensation figure that the government is obligated to pay to Umeme at the end of its 20-year electricity distribution concession, which is set to expire in March 2025.
While the company has not publicly disclosed the specific areas of disagreement, the use of the term inter alia in the statement suggests that other unresolved matters may also be in contention.
Under the provisions of the Concession Agreement, both parties are now required to engage in good faith negotiations for a period of 30 days from the date the notice was served, meaning the initial resolution window will expire on May 11, 2025.
If no agreement is reached during this period—or within any mutually agreed extension—the matter will be escalated to international arbitration in London.
This development introduces a layer of uncertainty for Umeme’s shareholders and potential investors. The Board has advised the public to exercise caution when trading in the company’s shares and to seek professional financial advice.
The company’s announcement was made in compliance with regulatory obligations under Rule 36 and 38 of the Uganda Securities Exchange Listing Rules, 2025, as well as Regulation 89(2) and (6) of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023 of Kenya.
Umeme’s concession has been a central pillar of Uganda’s electricity sector for the past two decades, managing the distribution and retail of electric power across the country.
However, the company’s future beyond March 2025 has been uncertain since the Government of Uganda announced in 2022 that it would not renew the concession.
The declaration of a dispute now complicates the final phase of Umeme’s operations under the current arrangement.
Analysts suggest that the outcome of these negotiations could influence not only Umeme’s financial closure but also the government’s reputation among international investors.
Arbitration in London would likely involve significant legal and financial costs, as well as public scrutiny.
Neither the Ministry of Finance nor Umeme’s legal representatives, Shonubi, Musoke & Co. Advocates, have released additional comments at this time.
Investors, stakeholders, and the broader public will be closely monitoring developments over the coming weeks as both parties seek an amicable resolution.
If they fail to do so within the prescribed time, a protracted arbitration process could follow—potentially dragging the dispute into the international legal arena well beyond the expiration of Umeme’s concession.
For now, Umeme has reiterated its commitment to following the legal process and has urged stakeholders to remain informed and cautious.
