Government Revises Buy-Out Terms for Power Distributor UMEME Limited After Parliamentary Audit
In a major financial and governance development, the government of Uganda has revised the buy-out figure for the electricity distributor UMEME Limited following an Auditor General’s special audit report, prompting political debate and scrutiny of transparency in the sector.
Key details
On March 21, 2025, the Parliament of Uganda approved the government’s proposal to borrow US$190 million from Stanbic Bank Uganda to compensate UMEME for unrecovered investments at the end of its 20-year concession.
However, on March 27 the Auditor General’s special audit revealed the actual payable amount is US$118 million (approx. UGX 432.7 billion). Parliament adopted the revised figure during the plenary sitting.
MPs raised concerns about the “last‐minute” nature of the loan request, lack of full asset register, and discrepancies between earlier estimates (US$190 m) and the audited figure (US$118 m).
According to the audit, UMEME had claimed unrecovered investments of US$234 million; post‐audit, only US$118 million was validated.
The government must settle the buy-out before the concession ends (March 31, 2025) to avoid penalties and interest according to the terms of the lease and assignment agreement.
Why it matters & implications
The revision from US$190m to US$118m represents a significant saving for taxpayers and raises questions about the accuracy of prior government estimates and oversight.
Transparency and accountability are under the spotlight with MPs questioning process, due diligence, asset valuation and timing of the loan request.
The energy sector is critical for Uganda’s economic development; mismanagement or confusion in such large deals can affect investor confidence and public trust.
Decisions about this buy-out will have ripple effects: it influences the cost to the state, future tariffs, reliability of electricity distribution, and the government’s role once it takes over UMEME’s concession.
For the public, this story highlights governance issues in major contracts and how state decisions on utilities impact national finances.
What to watch next
Final settlement with UMEME: will the government pay exactly US$118 million or is there negotiation/adjustment?
Implementation of the takeover: when and how will the distribution assets be transitioned from UMEME to the state entity?
Any legal challenges, investigations or parliamentary hearings triggered by this audit.
Impact on electricity tariffs, supply stability and service delivery in the months ahead.
