INSIDE UMEME BUYOUT DEAL as Ssemujju Claims Stanbic Bank Bribed MPs, Eyeing Shs 130 Billion Profit

Before Ugandan MPs broke off for the weekend, they approved the request by Government to borrow US$190Million (up to Shs 699.938 billion — that is nearly Shs 700 billion) from Stanbic Bank for the buyout of power distributor. Now Kira Municipality MP Ibrahim Ssemujju Nganda has claimed that Stanbic Bank bribed the MPs to ensure that the financial institution gets the deal to lend to government so as to get up to $35m in interest (you can call it profit if you choose). 

“The government is being forced to borrow USD 190 million to pay Umeme yet Stanbic Bank is at the center of this transaction. They will make USD 35 million in interest,” Ssemujju alleged as he appeared on Capital Gang on the morning of Saturday, March 22, 2025.

“This is why they bribed MPs to ensure the bill is passed.”

Let us remind you of the events leading to the decision.

The Auditor General, Edward Akol, and the Committee of National Economy told Parliament nor to rush the deal, warning that there was no clarity on the actual buyout amount for Umeme.

John Bosco Ikojo, the Chairperson National Economy Committee, presented a report on the government’s request to  borrow up to $190m for Umeme buyout.

Ikojo said that there was proof from Electricity Regulatory Authority (ERA) that Umeme had gotten a significant amount of the money it had invested in Uganda.

He added that the loan of $190m or nearly Shs700bn was many times above the $127.6m or Shs 467.8bn  Umeme was yet to recoup from its investment.

“Electricity Regulatory Authority (ERA) indicates that their initial estimate of the UMEME buy out amount in September 2023, communicated to the Ministry of Energy was $225.75 million and it has since reduced to $127.66 Million in March 2025,” he explained.

“The amount keeps changing based on the additional investments made by Umeme and recoveries from the end user tariffs. The total estimated investments by Umeme as approved and verified by ERA amount to $746.798 Million inclusive of $10.84 million to be invested by end of March 2025. The total Amount recovered by Umeme US$625.22 million leaving a balance of US$127.66 unrecovered.”

THE PAIN OF STANBIC BANK LOAN TO UGANDAN TAXPAYERS 

Ikojo also volunteered the estimates for the cost of the loan on tax payers. He noted that by the end of the five-year period within which government was expected to pay the $190m loan, Ugandan taxpayers would have paid up to $235.41m to Stanbic Bank.

“The present discounted value of the loan of USD213.37 million is higher than the nominal value of the loan USD190.988 million. This implies that the total future payment of the loan is costlier than the proposed amount to be borrowed in present terms,” he noted.

“The total future payment of the loan will amount to USD235.41 million after the loan period of 5 years. The loan is Commercial since its grant element (-11.7 per cent) is significantly lower than the concessional limit of 35 per cent.”

The details of the loan agreement indicate that the government will repay Stanbic Bank within five years. The loan will attract a two per cent interest rate charged annually in case of defaulting on government’s side.

Government will pay Stanbic Bank 1.2 per cent of the loan amount as arrangement fees.

But Attorney General Kiryowa Kiwanuka was interested in the suspension of Rule 155 (3) of the Rules of Procedure to block the Committee on National Economy’s presentation of the report on the request of $190m for Umeme buyout.

AG Kiwanuka warned that there should not be any further delays since these would attract more penalties to be met by Ugandan tax payers.

“This matter of Umeme has been with us for a very long time. It is a very urgent matter and the deadline upon which we are supposed to make this payment ends on March 31, 2025. If we don’t, there will be penalties and costs. I request that we suspend the operation of Rule 155 (3) in accordance with Rule 16 so the Committee of the whole House considers this,” said Kiryowa.

But when he presented the report by the Committee on National Economy, Ikojo made it clear that there was need to halt the approval of the $190m loan from Stanbic Bank for the buyout of Umeme.

“Given that the Auditor General has not determined the final buyout amount and considering the period remaining to come to the end of [Leasing and Licensing Agreement], the Auditor General expeditiously reconciles with ERA and UEDCL to determine the final Umeme buyout cost and submit to Parliament to guide approval of the loan request. Given the above observations, the Committee recommends that the Government proposal to borrow up to Euro equivalent of USD 190,988,556 from Stanbic Bank for the Umeme buyout be halted until the report of the Auditor General is presented to Parliament,” said Ikojo.

Parliament went ahead and approved the loan from Stanbic Bank. And MP Ssemujju made allegations of the bribery by the financial institution.

STANBIC BANK SPEAKS OUT

Stanbic Bank has issued a statement on claims by Ibrahim Ssemujju Nganda

“Stanbic Bank Uganda is aware of the damaging allegations made by Hon. Ibrahim Ssemujju Nganda, Member of Parliament
for Kiira Municipality, on the “Capital Gang” radio talk show [on March 22, 2025] morning claiming that the Bank paid bribes to Members of Parliament to influence the approval of a loan to Government,” the bank noted.

“We categorically dismiss these allegations as false, baseless and without merit. Stanbic Bank Uganda operates within a strict anti-bribery and anti-corruption policy. For that reason, any evidence that Hon. Ibrahim Ssemujju Nganda may have in support of these contemptable claims would be of utmost interest to us.”

The financial institution added: “The Government of Uganda is a valued client of Stanbic Bank, and all transactions with Government are conducted through Uganda’s constitutional and legal framework, including but not limited to parliamentary review and approval processes.

“Stanbic Bank remains fully committed to conducting business with the highest standards of integrity, supporting the Government of Uganda in financing national priorities in a transparent and ethical manner, as a responsible corporate citizen of this nation.”

Stanbic Bank is one of the most profitable banks in Uganda. See most profitable, and loss making banks in Uganda Here and There.

But Stanbic Bank, like many others, have in recent years suffered setbacks especially fraud. (See Details Here and There).

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