Parliament’s Public Accounts Committee (PAC) has summoned officials from the Ministry of Finance, Planning and Economic Development to explain inconsistencies surrounding the financing and payout of the Umeme buyout, after lawmakers questioned what happened to the balance of a loan approved by Parliament.
The committee’s decision followed a detailed presentation by the Permanent Secretary in the Ministry of Energy and Mineral Development, Eng. Irene Bateebe who outlined the chronology of events leading to the conclusion of Umeme’s 20-year electricity distribution concession and the subsequent government buyout.
The accounting officer explained that under the support agreement signed two decades before the concession expired in March 2025, the Office of the Auditor General (OAG) was mandated to conduct a comprehensive financial, legal, technical and environmental audit to determine the final buyout amount payable to Umeme.
She clarified that the buyout was not compensation but rather reimbursement for investments made by Umeme that had not yet been recovered through the tariff mechanism approved by the Electricity Regulatory Authority (ERA). “The buyout amount was largely that amount where Umeme had invested and over that period and had not recovered; t wasn’t compensation,” she told the committee.
According to the ministry, the Auditor General began the audit in April 2024, nearly a year before the concession expired. The first draft audit report issued in January 2025 estimated the buyout at USD 190.9 million, while Umeme independently submitted its own estimate of USD 235.98 million to the Ministry of Finance.
Based on the Auditor General’s preliminary findings, the Ministry of Finance sought Cabinet approval to borrow up to USD 190.9 million (approximately Shillings 710 billion) from Stanbic Bank to finance the buyout. Parliament later approved the borrowing in March 2025 on the understanding that only the final amount verified by the Auditor General would ultimately be paid.
Subsequent audit reviews, however, revised the figures before the final report was issued on March 26, 2025, reducing the verified buyout amount to approximately USD 118 million (approximately Shillings 441 billion). Government paid the verified amount two days later.
The Permanent Secretary further revealed that the Auditor General later conducted additional verification of work in progress undertaken between January and March 2025. This resulted in an additional USD 8.4 million buyout payment, which government settled on June 30, 2025.
She said the difference between the amount Parliament approved for borrowing and the amount eventually paid resulted from the evolving audit process and continued reconciliation of investments over the 20-year concession period.
The ministry also defended government’s decision not to offset outstanding obligations owed by Umeme before making the payment, saying doing so would have complicated the transition of electricity distribution from Umeme to the Uganda Electricity Distribution Company Limited (UEDCL).
Bateebe explained that Umeme had disputed the Auditor General’s initial assessment and maintained that it was entitled to a much higher buyout amount. Government therefore opted to complete the concession handover first before addressing outstanding disputes through arbitration.
She added that efforts to resolve the disagreements amicably failed, prompting Umeme to file arbitration proceedings in London in accordance with the support agreement. UEDCL has also initiated separate arbitration over amounts it claims Umeme owes. The ministry further noted that delaying payment of the buyout would have exposed government to significant penalty interest under the support agreement, ranging from 10 percent after 30 days to 20 percent for delays exceeding 90 days after the concession ended.
However, PAC Chairperson, Patrick Oshabe Nsamba questioned the whereabouts of the balance after Parliament had approved borrowing nearly USD 191 million, yet only USD 118 million, plus the later USD 8.4 million (approximately Shillings 31 billion) was paid to Umeme.
He said the committee had since received several Auditor General reports relating to the Umeme concession and will dedicate the following day’s sitting to exhaustively examine the buyout process. The committee directed the Ministry of Finance to appear before PAC to explain how much was actually borrowed from Stanbic Bank, how much was released, and account for any unutilised balance.
In another audit query, PAC also directed the Ministry of Energy and Mineral Development and the Uganda Electricity Transmission Company Limited (UETCL) to reconcile conflicting financial records after lawmakers uncovered inconsistencies surrounding more than UGX132 billion in unpaid rural electrification levy funds.
The matter arose during the committee’s examination of the Auditor General’s report, where legislators sought explanations for a receivable of Shillings 121 billion reflected in the Ministry of Energy’s books but not in UETCL’s financial statements-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
