Umeme shareholders to get Shs1 trillion in buyout

The figure, according to Daily Monitor, is indicated in Umeme’s books of account as the buyout from the government. This amount is a result of investments Umeme has made and have been approved by the Electricity Regulatory Authority.

However, the Ministry of Energy is projecting a $200m (Shs732b) payout.

The exact payout figure will be determined by the final compliance audit from the Auditor General's office.

According to Umeme, they have invested $750 million (Shs2.7 trillion) in the past 17 years and recovered it on an ongoing basis. However, the buyout is locked in the concession. The Ministry of Energy has since ordered that new investments be paused in order to maintain the payout figure in a reasonable range.

According to Daily Monitor, shareholders are in high spirits due to the payout, partly due to a portion of them being against a renewal of the lease and assignment agreement.

According to the Chief Executive Officer of Uganda Securities Exchange (USE) Paul Bwiso, Umeme's shares started to rise when the news of the non-renewal of the concession went public.

“Some shareholders decided to sell off their shares but that does not mean that the company’s activities at the USE are winding up. We don’t expect Umeme prices to continue rising because it has reached the highest level of Shs300, which it cannot rise again in the short run,” he told Daily Monitor.

The company is expected to continue to trade on the stock exchange until March 25, 2025.

Internally, Umeme is under pressure to deliver the pending workload which includes World Bank's funded Electricity Access Scale-up (EASP) project. The $400 million project is aimed at delivering 1.3 million last-mile connections to expand the electricity network.

It is hoped that by the time of the contract expiry date, the Uganda National Electricity Company (UNEC) will be operational to inherit the distribution network, thus sidelining the proposed Public Private Partnership deal.

UNEC is the proposed utility company to take over from Umeme. It was born out of the merger of Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL), and Uganda Electricity Distribution Company Ltd (UEDCL). Its trial run is expected to kick off in June.