The Ugandan government is set to pay US$215 million to acquire majority shares of power distributor Umeme, as its 20-year contract comes to an end in 2025.
This will give the government full control of the power distribution system, ending the longstanding private sector arrangement.
However, concerns have been raised by Members of Parliament over the possibility of widespread blackouts and power outages, as Umeme reportedly fails to replace damaged transformers and poles due to its impending exit.
The Permanent Secretary of the Ministry of Energy, Irene Bateebe, revealed that Uganda Electricity Distribution Company Limited (UEDCL) requires US$158 million to invest in the distribution system over the next three years.
This is meant to reduce the final buyout amount payable to Umeme to US$7.1 million. Bateebe said that if they attract concessional funding through UEDCL, the government can invest and gradually reduce Umemes’ investment.
UEDCL requires a capitalization of US$64 million to build its capacity. The final buyout figure of Umeme could either decrease or increase based on the Auditor General’s investigations.
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