Members of Parliament on the Committee on Environment and Natural Resources have faulted the Government for paying US$118 million (approximately Shs 428.9 billion) to Umeme Limited as a buyout package ahead of the end of its concession in March 2025, despite the company reportedly owing Shs 600 billion to the Uganda Electricity Transmission Company Limited (UETCL).
The concern was raised during a committee meeting with officials from the Ministry of Energy and Mineral Development, UETCL, and Umeme, convened to review the state of Uganda’s power distribution and transmission networks amid increasing complaints of power blackouts across the country.
Soroti County MP Patrick Aeku questioned why the Government proceeded with the payout before reconciling Umeme’s financial obligations to UETCL.
Soroti East MP Herbert Ariko echoed similar concerns, urging the Ministry of Energy to ensure accountability and value for money in the ongoing transition from Umeme’s concession. He said the move risked setting a bad precedent if government payments were made before settling outstanding obligations.
The legislators also demanded clarity on how the Ministry plans to manage power distribution after Umeme’s exit, given persistent challenges in service delivery, including frequent outages and high connection costs.
Officials from the Ministry of Energy, in response, assured the committee that the transition process is being handled in accordance with contractual terms and that financial reconciliations between Umeme and UETCL are underway.
Umeme’s 20-year electricity distribution concession, which began in 2005, is set to end in March 2025, after which the Government is expected to take over distribution responsibilities through new institutional arrangements.