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UMEME confirms Uganda exit

by Editorial Team
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By Rick Kayizzi

Uganda’s power distributor, Umeme, has reported that the Government will not renew its concession to distribute power in the country after it runs out in 2025.

“Umeme has formally received written communication from the Government of the Republic of Uganda, notifying it that the current concession will continue to run until its natural end in March 2025 as stipulated in the concession agreements after which, there will be no renewal,” reads part of the recent statement.

Umeme’s remarks come after the Minister of State for Energy, Okasai Opolot, said Umeme’s fate was sealed in a recent cabinet meeting, ending years of speculation on Government’s renewal of the concession.

Okasai had earlier said Government was preparing the Uganda Electricity Distribution Company Ltd to take over power distribution.

The Government had entered into protracted negotiations with Umeme to compel it to revise downwards its return on investment, (ROI) which stood at 20%.

President Yoweri Museveni, way back in 2018, had called for the halt of extension of the power distributor’s concession on the premise that terms such as return on investment had continued to be high thus affecting the electricity tariff.

Umeme, however, promised to run the last mile in the ongoing concession.

“We remain committed to performing our obligations as per the existing concession agreements and will continue to operate and maintain the electricity distribution system in line with prudent utility practice to ensure continued service delivery through to the end of the concession,” reads part of a statement issued by Peter Kaujju, the Umeme publicist.

Kaujju said that pursuant to rule 36 (1) (a) and (b) of the Uganda Securities Exchange (USE) Listing Rules 2021, the company is required to amongst others disclose to its shareholders and the general public new developments in its sphere of activities which are not public knowledge and which may lead to material movements in the ruling price of its listed securities.

The Government recently took over Namanve thermal power plant which was being run by Jacobsen under a 20-year concession and has vowed not to renew the Eskom concession to run Kiira and Nalubaale power dams beyond 2023.

Hiring private companies has largely been blamed for the high cost of power and unstable supply. Several pundits have called upon Government not to renew the concession.

Dickens Kamugisha, the chief executive officer of the Africa Institute for Energy Governance-AFIEGO, recently said value for money was lacking in the concession, adding that Government shouldn’t just bring in the private sector for the sake of it.

“There is need for the Government to do a forensic study of all the companies and agencies in the energy sector to have their performances over the years scrutinized against their terms of references,” he was quoted in the media as saying.

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