Umeme Limited, Uganda’s largest electricity distributor, has formally declared a dispute with the Government of Uganda regarding a contentious buyout amount that the company says remains unpaid following the expiration of its 20-year electricity distribution concession.
In a public notice issued on Monday, the company’s Board of Directors said it had invoked clauses 9.1 and 9.2 of the Support Agreement entered into with the Ugandan government, formally declaring a dispute over what it described as the Buy Out Amount due to the company under the terms of the Concession Agreement.
The notice, addressed to shareholders, prospective investors, and the general public, said Umeme served the Government of Uganda with a formal Notice of Dispute on 11 April 2025. The government was represented by the Ministry of Finance, Planning and Economic Development.
The electricity distributor emphasised that the declaration of the Umeme buyout dispute activates a 30-day negotiation window, during which both parties are required to attempt to resolve the matter in good faith. This dispute resolution framework is in line with the provisions of the Concession Agreement, which governed the company’s operations in Uganda since its inception in 2005.
“In the event that no agreement is reached within the thirty (30) days, or such further period as may be agreed upon between the parties, the matter shall be referred to arbitration in London,” Umeme said in the statement.
The announcement comes less than four months after the end of Umeme’s 20-year concession agreement with the Ugandan government, which expired in March 2025. Under the terms of the agreement, the government was obligated to pay a Buy Out Amount for the unrecovered investments made by Umeme during the course of the concession. However, it appears the parties have failed to agree on the valuation or terms of the compensation.
While Umeme did not disclose the exact amount in contention, analysts suggest the Buy Out Amount could run into hundreds of millions of dollars, given the company’s sustained investment in Uganda’s energy infrastructure, including upgrades to distribution lines, substations, and metering technology.
The announcement was made under Rule 36 and Rule 38 of the Uganda Securities Exchange Listing Rules, 2025, as well as Kenya’s Capital Markets (Public Offers, Listings and Disclosures) Regulations of 2023, which require prompt disclosure of material developments likely to affect investor decisions.
The formal declaration of the dispute has cast a spotlight on Uganda’s energy transition strategy, which has seen the government take steps to re-nationalise electricity distribution under the Uganda Electricity Distribution Company Limited (UEDCL) following the exit of private sector players like Umeme.
Umeme began operations in 2005 after acquiring the distribution assets previously operated by the Uganda Electricity Distribution Company under a 20-year concession. Over the years, it has significantly modernised Uganda’s electricity distribution network, increasing grid access and improving reliability.
The company’s journey, however, has not been without controversy. It has faced periodic criticism over high electricity tariffs, power outages, and customer service delivery. In 2022, the government announced that it would not renew Umeme’s concession when it expired in March 2025, sparking widespread speculation over the transition plan and compensation obligations.
Since the announcement, Umeme has been working to wind down operations and hand over assets to the government while maintaining limited-service delivery to ensure a smooth transition.
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