Power distributor Umeme Limited has opened up on reports that it will leave Uganda at the expiry of its 20-year Concession from the Government of Uganda. The expiry date, which is the 30th day of March, 2025, is a few years away.
The Ugandan government is expected to take over the distribution function of the electricity supply industry after Umeme’s exit. Sources at the Ruth Nankabirwa Ssentamu-led Ministry of Energy and Mineral Development say that Gen Yoweri Kaguta Tibuhaburwa Museveni’s government is much opposed to renewing Umeme’s concession in 2025.
In line with rules set by the Uganda Securities Exchange (USE), the management of Umeme has come out to clarify on the reports of its looming exit from the Ugandan market.
“Pursuant to Rule 37 (5) of the Uganda Securities Exchange (USE) Listing Rules, 2021 the Company is required to promptly clarify any rumours or reports (whether true or false) which are likely to have an effect on the trading in its shares or likely to have a bearing on investment decisions,” Umeme’s management noted in a statement dated November 09, 2022.
“The Company’s attention has been drawn to comments made by the Minister of State for Energy on Wednesday, 2nd November 2022 at the Power Forum 2022, a Subsequent article that appeared in the New Vision Newspaper of Tuesday, 8th November 2022 titled ‘Govt Confirms Umeme Exit in 2025’ and to comments in response to the Hon. Minister’s statement circulating on social media.”
In the statement, Umeme made it clear that its future in Uganda was uncertain beyond 2022, and would only depend on a decision by Museveni’s government on whether to renew the concession or terminate it and send Umeme packing.
“As disclosed in its Prospectus at the Initial Public Offering, subsequent Annual Reports and public disclosures, Umeme Limited holds a 20-year Concession from the Government of Uganda, whose natural term expires on the 30th day of March, 2025. To-date, this position remains unchanged,” added management in a clarification on media reports.
“The Company shall, in accordance with the Listing Rules governing it, promptly issue a Public Notice once written communication is received from the Government on the future of the Umeme Concession.”
For now, Umeme says it is focused on fulfilling its mandate as set out in the terms of the concession as the company waits for a decision by government.
“The Company remains committed to performing its obligations as per the existing Concession and will continue to operate and maintain the electricity distribution system in line with prudent utility practice to ensure continued service delivery,” Umeme said.
You can see our previous reporting on Umeme’s troubles, especially Parliament’s recommendation for the cancellation of Umeme’s contract HERE.
