The Ugandan government has severed ties with Umeme Limited, the country’s main electricity distribution company. The current concession term expires on March 30, 2025, and will not be renewed, according to a letter from the government.
Umeme, which distributes about 97 percent of all Uganda’s electricity, will have its contract with the government come to an end in March 2025.
“As disclosed in its Prospectus at the Initial Public Offering, subsequent Annual Reports and Public Disclosures, Umeme Limited holds a 20-year Concession from the Government of Uganda, whose natural term expires on 30th March 2025. The concession is enshrined in several binding Concession Agreements,” Umeme said in a public notice.
“The Company has formally received written communication from the Government of the Republic of Uganda, notifying it that the current Concession will continue to run until its natural end in March 2025 as stipulated in the Concession Agreements
after which, there will be no renewal.”
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The exit, which was unexpected, follows a fallout with the government, which accuses it of expensive rates.
“To manage the concession buyout and minimize suffocating the expenditure of the Government when the Umeme concession ends, it is important that additional investments by Umeme be regulated and or halted to reduce on the final buyout amount,” Minister of State for Energy Sidronius Okaasai Opolot told MPs last month.
The government of Uganda, according to media outlets, is considering ending the contract upon expiry, and then opting for an alternative service provider with friendlier terms.
“The Company remains committed to performing its obligations as per the existing Concession Agreements and will continue to operate and maintain the electricity distribution system in line with prudent utility practice to ensure continued service delivery through to the end of the Concession,” the company added.
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