Ministry of Energy Presents Shs2.9tn Budget Framework Paper

 

The Ministry of Energy and Mineral Development has proposed a budget framework paper for the 2025/26 financial year amounting to over Shs2.9 trillion.

This includes significant allocations for sustainable energy development and the sustainable extractives industry.

During a presentation to the Natural Resources Committee of Parliament, led by State Minister for Energy and Mineral Development Opolot Okosaai and Permanent Secretary Irene Bateebe, the ministry outlined a budget breakdown.

It has Shs16.7 billion for wages, Shs88.09 billion for non-wage recurrent expenses, Shs21.02 billion for Sustainable Energy Development (SED), and Shs36.959 billion for Sustainable Extractives Industry Development (SEID).

A major focus of the presentation was the ministry's request for close to $200 million in compensation for UMEME, whose concession contract will expire at the end of March 2025.

Bateebe highlighted that, as of March 2025, UEDCL will take over operations under the UMEME concession, and the Ministry is working with the Auditor General to finalize the financial details.

“We have been working for the last two years to prepare UEDCL for this transition, in line with Cabinet’s decision. As of now, UMEME is still operational, but UEDCL will start its work in April 2025,” Bateebe said.

In addition, Bateebe is seeking over USD 70 million to facilitate UEDCL's operations.

A contentious issue during the session was the delayed production of the first oil in Uganda, originally announced four years ago.

While Tanzania has made significant progress on its 90 km crude oil pipeline, Uganda has only completed 10 km, raising concerns about meeting production targets.

Herbert Edmund Ariko, Chairperson of the Natural Resources Committee, expressed disappointment with the lack of progress, stating, "The oil production is not on track as anticipated, and there are doubts about whether we will meet the targets set by the government."

However, Bateebe reassured the committee, saying, “Despite the challenges, we are on track. We have completed three-quarters of the pipeline required for the East Africa Crude Oil Pipeline (ECOP) project, and we remain committed to moving forward.”