Umeme Declares Formal Dispute with Government Over Buyout Amount
KAMPALA, Monday, April 14, 2025 — Umeme Limited has formally declared a dispute with the Government of Uganda over the buyout amount payable following the end of the company’s 20-year electricity distribution concession, setting the stage for possible international arbitration in London.
In a public notice issued today, Umeme announced that it had served a formal Notice of Dispute on April 11, 2025, to the Government of Uganda—represented by the Ministry of Finance, Planning and Economic Development.
The company said the move followed a resolution by its Board of Directors and was made pursuant to clauses 9.1 and 9.2 of the Support Agreement signed between the two parties.
The dispute centres on the amount of compensation owed to Umeme for unrecovered investments in Uganda’s electricity infrastructure.
While the government, acting on the advice of the Auditor General, paid Umeme USD 118,385,603, the company has maintained that the total should be closer to USD 234 million.
“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 stated, adding that if no agreement is reached during this period, the matter “shall be referred to arbitration in London.”
The company also advised shareholders and the public to exercise caution in trading its shares and to seek appropriate professional advice, indicating the potential for continued uncertainty in the coming months.
This marks a major development in the post-concession landscape of Uganda’s electricity sector.
Umeme officially handed over the national distribution system to the Uganda Electricity Distribution Company Limited (UEDCL) on March 31, 2025, after the concession ended on February 28.
While government officials, including Energy Minister Ruth Nankabirwa, have insisted the matter was closed with the payment of the Auditor General’s recommended amount, Umeme’s latest action confirms that the dispute remains far from resolved and could escalate to a legal battle on the international stage.
Should the negotiations over the next 30 days fail, the case will be decided by an arbitral tribunal in London, as stipulated in the Concession Agreement.
Chimp Reports