Uganda: Umeme Electricity Distribution Contract to End in 2025

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  • The Ugandan government has confirmed that they will not renew the contract of their private electricity distributor, Umeme, after 2025.
  • Instead, the government of Uganda will be going ahead with plans to form its own company to take on distribution of power in the areas that Umeme is currently covering.

“The planned Uganda National Electricity Co. will also assume generation responsibilities when Umeme’s 20-year contract ends,” sais Minister of State for Energy, Mr Sidronius Okaasai Opolot.

“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,” Umeme said. Umeme is listed on the Kenyan stock  exchange. Read more

Umeme added: “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.”

Uganda will form a state-owned electricity distributor to take over when Umeme Ltd.’s concession expires in March 2025 in a reported bid to reduce power tariffs by cutting out the intermediary.

Without sharing details, Minister of State for Energy Sidronius Okaasai Opolot advised that the government will work on a payout for Umeme under a buyout clause before the expiry. He said the planned Uganda National Electricity Co. would also assume generation responsibilities when the 20-year contract ends.

Umeme Limited holds a 20-year Concession from the Government of Uganda, and their natural term expires on 30 March 2025.

Uganda’s National Social Security Fund (NSSF) is the biggest Umeme shareholder, with a 23.34% stake. Other top shareholders include Allan Gray Ltd., Kimberlite Frontier Africa Master Fund and Utilico Emerging Markets Ltd., according to the company’s latest annual report.

Author: Nomvuyo Tena

Nomvuyo Tena is a Content Producer at Vuka Group and is as passionate about the energy transition in Africa as she is about music and Beyonce. 

This article was originally published on ESI Africa and is republished with permission with minor editorial changes.


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