A Umeme technician at work. A fresh dispute has erupted over Umeme’s exit, with the Office of Attorney General (AG) putting an 11th-hour spanner in the works. PHOTO/FILE
The Chief Executive Officer of Electricity Regulatory Authority (ERA), Ms Ziria Tibalwa has revealed to legislators that there is a likelihood that government may not be ready to effectively take over operations of the Umeme, whose power distribution contract ends on March 31, 2025.
In a confession made before lawmakers on the National Economy committee that is currently processing the buyout loan request, Ms Tibalwa indicated that the takeover by the Uganda Electricity Distribution Company Limited (UEDCL) from Umeme may be hard since the required funds have not been secured yet the deadline to concession is nearing closure.
This was contained in her plea as she notified lawmakers that the UEDCL requires at least USD50 million as initial capital to kickstart operations and services being done by Umeme.
“On our side, we aren’t even ready with the US$50 million for UEDCL to start, let alone, the concession agreement wouldn’t allow UEDCL to step in," Ms Tibalwa said.
She added: “This is a learning process for government that as we continue in engaging in new contracts, we need to find ways of flexibility and escape routes where UEDCL should have started working hand in hand with Umeme, where UEDCL would invest long before the concession agreement.”
The concern is raised at time when government is racing to find money to finance the transfer of operations. Parliament on March 12, 2025 approved a Shs4.2 trillion Supplementary Budget of which Shs725.42 Billion will go towards the financing of the Umeme buyout by government.
However, in the meeting with the House committee on Natural Resources chaired by Mr Herbert Ariko March 18, 2025, the Minister for Energy and Ruth Nankabirwa revealed that the exact amount required for the transfer process is not yet known. She said the exact amount will only be determined at the end of this month after the Umeme contract with government expires.
Minister Nankabirwa revealed that her office will initiate discussions with the ministry of Finance to moot alternative means of finding resources to finance the buyout that has to happen at the start of April.
In same way, Ms Nankabirwa stated that not all staff under Umeme will be transferred to UEDCL once it commences power distribution operations in April.
“The workers of Umeme, their applications were rejected. But the objective of restructuring was to make sure that we have a saving. On my side, the objective was to remove duplication and enhance efficiency. Where we find out your job is already taken and we already have it with UEDCL, your contract has ended with Umeme. We are looking for a slot with Umeme, but we have this person who has been working with UEDCL, do we throw that person out and we bring in the Umeme person? If we interview both of them, the Umeme one and UEDCL, one of them is bound to lose. So this is inevitable,” Ms Nankabirwa said.
