Power distributor Umeme Limited has officially gone head-to-head with the Government over a massive buyout bill and the numbers are worlds apart.
In a public notice issued today, Umeme confirmed that it served a Notice of Dispute to the Ministry of Finance on April 11, kicking off a 30-day standoff that could end in international arbitration in London.
Umeme is demanding a staggering $234 million (about Shs880 billion) for investments it says were never recouped during its 20-year electricity distribution concession. But the Auditor General, in a government-backed review, pegged the buyout at just $118 million (around Shs430 billion).
The Energy Ministry backed the Auditor General’s figure, throwing out both Umeme’s claim and an earlier internal estimate of $190 million.
Energy Minister Ruth Nankabirwa has been on record as stating that; “The Auditor General has audited and determined $118 million as the buyout amount.”
But Umeme isn’t having it, accusing the government of breaching the 2005 Support Agreement, which guarantees compensation for unrecovered investments.
If no deal is reached by May 11, both parties could find themselves in a courtroom in London, as per Clause 9 of the agreement, which allows for international arbitration.
The company is urging investors to tread carefully: “Shareholders and investors are advised to exercise caution when dealing in the Company’s securities until the outcome of the dispute is known,” Umeme’s board warned.
The fallout tarnishes what had been hailed as a smooth takeover by UEDCL on March 31. Now, the headlines are dominated by accusations, valuation wars, and questions about how Uganda handles public-private infrastructure partnerships.
Since 2005, Umeme says it has invested more than $600 million in upgrading Uganda’s power grid. But with the plug pulled on their concession, the company wants to make sure it gets every last shilling it believes it’s owed.
Will a settlement be reached, or is Uganda headed for another international courtroom clash? The countdown is on.
