Umeme Limited’s shares have lost about 85 percent of their value since the electricity distributor handed over its concession to the government in March 2025, making the stock one of the worst-performing counters on the Uganda Securities Exchange (USE) and the Nairobi Securities Exchange (NSE).
The decline has accelerated this year, with the company’s share price falling by nearly three-quarters from 242 shillings at the beginning of 2026 to 63 shillings in last week’s trading. Before the concession ended on March 31, 2025, the stock was trading at 415 shillings.
The sharp drop follows heavy losses recorded in 2025 and the company’s warning that it expects to report another loss for the first half of 2026.
In a notice to shareholders ahead of its annual general meeting later this month, Umeme attributed the expected loss to the cessation of its core business after handing over Uganda’s electricity distribution network to the government at the expiry of its 20-year concession on March 31, 2025.
The company says it currently has no operating revenue and is instead relying on the outcome of an international arbitration process to recover additional funds from the government.
“The Company continues to actively pursue its outstanding claims against the Government of Uganda through the ongoing dispute resolution process as stipulated in the Privatization Agreements and as notified to the public previously,” the notice states.
Investor optimism had initially pushed Umeme’s share price higher before and immediately after the concession expired, as many expected a swift government buyout payment. Trading in the stock was suspended for 74 days from March 31, 2025, to curb excessive speculation over the asset valuation and compensation process.
When trading resumed in June 2025, uncertainty over the company’s future triggered heavy selling, sending the share price into a sustained decline.
The uncertainty has persisted for more than a year, compounded by the suspension of dividend payments and the absence of clarity on when the arbitration process will be concluded.
Despite the price collapse, Umeme remains one of the most actively traded stocks on the Uganda Securities Exchange. According to the USE daily trading report, it is the third most actively traded counter by volume, as both retail and institutional investors continue to exit their positions.
The company’s shares have also come under pressure on the Nairobi Securities Exchange, where Umeme is cross-listed. The stock has fallen from about 20 Kenyan shillings before the concession ended to around 7.04 Kenyan shillings.
Market analysts say investors now view Umeme as a highly speculative stock because its future value depends almost entirely on the outcome of arbitration at the London Court of International Arbitration. The dispute centres on the value of Umeme’s unrecovered investments in Uganda’s electricity distribution network at the end of the concession.
While the government adopted the Auditor General’s valuation of 118 million US dollars (about UGX 433 billion) and paid that amount, Umeme rejected the assessment, arguing that it is entitled to 292 million US dollars (about UGX 1.1 trillion).
The company is therefore seeking an additional 174 million US dollars (approximately UGX 650 billion) through arbitration. The buyout represents investments Umeme made in expanding and improving the electricity distribution network that had not yet been recovered through its operations when the concession expired-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
