Uganda’s former electricity distributor, Umeme Ltd, has formally disagreed with the $118 million buyout offer extended by the government, escalating tensions over the disputed payout. The company says it expected at least $234 million as compensation for its investments at the end of its 20-year electricity distribution concession, which expired on March 31, 2025.
In a public statement issued yesterday, Umeme confirmed it had formally declared a dispute with the Government of Uganda in accordance with Section 9 of the Support Agreement signed between the two parties.
The dispute was officially registered on April 11 and served through the Ministry of Finance, Planning and Economic Development.
“The Company will issue a formal Notice of Dispute… in respect of, inter alia, the Buy Out Amount payable to the Company,” read the statement issued by Umeme’s legal representatives, Shonubi, Musoke & Co Advocates.
The company now has 30 days, beginning April 11, to reach an amicable settlement with the government. If no agreement is reached, the matter will be referred to arbitration in London.
The conflict arises from Umeme’s claim that the government undervalued its remaining assets. While government auditors have verified $118 million, plus an additional $9 million still under review, Umeme insists that over $243 million remains unpaid from its total investments.
The dispute has already triggered market repercussions. Trading of Umeme’s shares on the Uganda Securities Exchange (USE) remains suspended. The initial suspension began on March 31, 2025, to facilitate a smooth transition of electricity distribution back to Uganda Electricity Distribution Company Ltd (UEDCL).
With no resolution in sight, the USE has extended the suspension by another 30 days, until May 14.
“The extension is aimed at protecting current and prospective investors from the potential impact of market speculation,” said USE in a statement.
As negotiations continue, all eyes now turn to the next 30 days—critical for both parties to avoid a drawn-out legal battle in international arbitration.