In a dramatic turn in Uganda’s energy sector, Umeme Limited has formally challenged the government over the buyout sum following the end of its 20-year electricity distribution concession. The dispute, centered on a nearly $116 million compensation gap, could now escalate to international arbitration in London.
On April 11, 2025, Umeme served a formal Notice of Dispute to the Government of Uganda, represented by the Ministry of Finance, Planning and Economic Development. The company made the announcement in a public notice released today, signaling a high-stakes legal showdown.
The dispute arises from differing views on compensation for unrecovered investments in Uganda’s electricity infrastructure. While the government, guided by the Auditor General’s report, paid $118.4 million, Umeme insists the true figure should be closer to $234 million.
The company’s Board of Directors approved the action under clauses 9.1 and 9.2 of the Support Agreement signed with the government.
“As stipulated in the dispute resolution clauses of the Concession Agreements, the Parties shall attempt in good faith to settle such Dispute within thirty (30) days,” the notice read. If the parties fail to reach a settlement, the dispute will move to International Arbitration in London.
In the meantime, Umeme has urged shareholders and the public to tread carefully when trading its shares, hinting at further market uncertainty in the coming months.
This development follows the end of Umeme’s concession on February 28, 2025, and the formal handover of Uganda’s national distribution network to the Uganda Electricity Distribution Company Limited (UEDCL) on March 31.
Despite government officials, including Energy Minister Ruth Nankabirwa, asserting that the issue was resolved with the Auditor General’s payment recommendation, Umeme’s latest move makes it clear: the battle is far from over.
If the ongoing negotiations fail, the matter will be decided by a tribunal in London, as provided for in the Concession Agreement.
