The Minister for Energy and Mineral Resources Ruth Nankabirwa downplayed fears that the power supply in the country is set to be interrupted with the exit of Umeme, following the expiry of the company’s concession on March 31, 2025.
After Umeme’s exit, the Uganda Electricity Distribution Company Limited (U.E.D.C.L) is set to take over as the national power supplier, a move that has sparked untold speculation and anxiety about what will happen next.
However, Nankabirwa has since allayed these fears by assuring Ugandans that there is no need to worry because the power supply in the country will not continue uninterrupted even after Umeme’s exit.
“We are moving steadily with the preparations for closure of the natural end of our 20-Year Concession. It is a journey that we have traversed with passion distributing safe and reliable power,” Umeme said on Tuesday, shortly after a meeting with the Minister.
Umeme Buyout Sparks Controversy
The Parliament of Uganda last week passed a Shs4.7 trillion supplementary budget, out of which USD190 million (about Shs700 billion) was earmarked as the buyout price for Umeme following the expiry of its concession, which is to be borrowed from Stanbic Bank.
Although Auditor General Edward Akol later put the buyout price at Shs732 billion, Umeme is demanding USD234.7 million, about Shs856 billion exclusive of applicable taxes, whereas the Electricity Regulatory Authority (ERA) contends that Umeme should be paid USD127.655 million, about Shs465 billion, according to their assessment.
Umeme claims their figure was computed based on the Net Accumulated Capital Investments of the Lease and Assignment Agreement (LAA).
But, following the disputes surrounding the actual figure for the buyout, the Attorney General, Kiryowa Kiwanuka, has since weighed in, asserting that ERA, as a regulator, is conflicted in the matter and cannot be fair to Umeme in determining the actual buyout figure.
It is important to note that although the Ministry of Energy had earlier assessed USD225 million, about Shs819.7 billion, the amount was later revised by the Auditor General to USD191 million, about Shs695.8 billion.
This amount has since been revised to USD 201 million, about Shs732.3 billion, exclusive of applicable taxes, but inclusive of USD 9.7 million, about Shs35.5 billion related to work-in-progress that is running until March 31st, 2025.
All this notwithstanding, ERA argues that throughout the concession Umeme has so far recovered USD625.22 (Shs2.2 trillion) leaving a balance of USD127 million (Shs462.7 billion), which is the amount they are entitled to; a position that is raising more questions than answers about how much the buyout will actually cost the Ugandan taxpayer.
About Umeme Yaka Meters
One of the impertinent questions that most Ugandans are asking about Umeme’s exit is whether their prepaid Yaka Meters will continue functioning after the U.E.D.C.L.
Nankabirwa has since revealed in a statement issued by the Ministry of Energy that the meters will continue functioning normally because Yaka is a property of the government of Uganda and will remain in full service even after Umeme’s exit.
In addition to that, all meter numbers will not change after U.E.D.C.L takes over and those with prepaid units will continue using them until their expiry and the tariffs will remain as per the rates set by the Electricity Regulatory Authority (ERA).
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