No white smoke yet from Umeme-Govt talks in London

Kampala, Uganda | THE INDEPENDENT | Talks between the electricity distribution company, Umeme Ltd, and the government of Uganda have failed to bear fruit, forcing the former to pursue legal means to recover the money it claims is owed by the state.

Following the end of Umeme’s 20-year concession and the government’s refusal to renew it, the company had to claim amounts it had invested but not yet recouped, as per the concession agreement.

While the government agreed to pay $118 million, and about $9 million is still undergoing verification, Umeme is holding out to claim a total of $293 million.  The company, being dissatisfied with the buyout amount computed and paid by the government of Uganda, formally issued a notice of dispute on April 11, 2025.

Subsequently, “good faith negotiations” between the two sides were entered into, running from May 2 to May 9, 2025, with an agreed extension to May 20, 2025.  However, it has now been disclosed that the talks failed to resolve the impasse, prompting Umeme to pursue arbitration in London, UK.

“Although the negotiations were able to resolve and agree on certain amounts as payable and which amounts will be paid by the government after the 31st day of May 2025, no resolution was reached on the payment of Umeme’s entire claim, which stands at the sum of $292 million over and above the admitted buyout amount of USD 118 million already paid by the government,” says the statement by Umeme.

It adds that the Office of the Auditor General is currently conducting an audit of the company’s 2025 investments, which, once admitted and paid by the government, would lead to a reduction in the claim.  Despite this, Umeme says it will continue with the arbitration process in its bid to recover all the amount it says is due to it.

“In the interests of the shareholders and the investing public, the company resolved to and will proceed to pursue the full recovery of all outstanding sums due through arbitration in London as stipulated in the concession agreements,” it says.

The process is underway to serve the government with the Arbitration Dispute Reference in the coming days to commence the arbitration process. Meanwhile, trading in Umeme Ltd shares on the Uganda Securities Exchange remains suspended for another 12 days. The involuntary suspension of activities on the counter has been extended to June 12, when the company’s financial statements are also expected to be released.

The suspension also affects trading on the Nairobi Stock Exchange, where the shares are cross-listed.  “Pursuant to the delayed good faith negotiations and ongoing reconciliations, the USE has approved the company’s request for a further extension to release its financial statements for the year ended 31st December 2024, which will now be published on 12th June 2025.”

During the suspension period, the company shall continue to comply with all the continuous listing obligations applicable to it.  In addition, the company shall submit a progress report to the Exchange regarding the current state of affairs and any proposed action.  The delay in releasing the results on the initially agreed date of May 31 was a result of the delayed good-faith negotiations and ongoing reconciliations.

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URN