Umeme Buyout Enters International Arbitration Amid UGX 1.1 Trillion Dispute
- AfriNews 247
- Jun 2
- 2 min read
Updated: Jun 2
Kampala – Uganda – The long-running saga over the Umeme buyout has officially escalated to international arbitration, following a major standoff between the power distributor and the Government of Uganda over the final compensation amount. At the heart of the dispute is a massive UGX 1.1 trillion (approximately USD 292 million) claim by Umeme — nearly triple the amount Uganda has already paid.
Clash Over Umeme Buyout Figures Intensifies
Originally, Umeme had filed a claim for USD 234 million at the expiry of its 20-year electricity distribution concession in February 2025. However, the Office of the Auditor General reviewed the figures and determined a much lower payout of USD 118.3 million, which the government settled.
Despite this, Umeme has now raised its claim to USD 292 million, citing additional reconciliations and unresolved investment components. In a public notice released on Monday, Umeme revealed that recent negotiations failed to resolve the full extent of its claim:
“Although the negotiations were able to resolve and agree on certain amounts as payable, no resolution was reached on the payment of Umeme’s entire claim which stands in the sum of USD 292 million over and above the admitted Buy Out Amount of USD 118 million already paid by the Government.”
Arbitration in London Underway
With no consensus reached, Umeme has confirmed it will initiate international arbitration proceedings in London, as stipulated in the original Concession Agreements. The Arbitration Dispute Reference is expected to be formally served to the Government of Uganda in the coming days.
The arbitration process could span months or even years, depending on the complexity of the arguments and final reconciliations—particularly as the Auditor General continues to audit Umeme’s 2025 investments, which may affect the final claim amount.
Impact on Stock Market and Investor Confidence
The Uganda Securities Exchange (USE) has responded to the dispute by extending the suspension of Umeme’s trading counter until June 12, 2025, citing investor uncertainty. Additionally, Umeme has been granted extra time to release its 2024 audited financial statements, now expected on the same date.
This high-stakes standoff is being closely watched by investors, energy stakeholders, and development partners. It is seen as a litmus test for Uganda’s approach to public-private partnerships (PPPs) and infrastructure investment security.
Background: Why the Dispute Matters
Umeme’s 20-year concession, which began in 2005, mandated the Government of Uganda to compensate the company for unrecovered infrastructure investments at contract expiry. While both parties agreed in principle, the dispute now revolves around the valuation, recognition, and admissibility of those investments.
What Lies Ahead?
Arbitration proceedings in London could shape how Uganda negotiates future PPP exits.
Investor sentiment remains volatile amid delays and legal uncertainties.
The final ruling may impact how governments balance fiscal responsibility with private investment obligations.
As the Umeme buyout arbitration takes center stage, Uganda enters a critical period in its infrastructure governance journey—one that will likely define the country’s attractiveness to private investors for years to come.
Stay tuned for updates as this high-profile legal battle unfolds.
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