The Uganda Electricity Distribution Company Limited (UEDCL) has officially taken over the distribution network from Umeme Limited, marking the end of a 20-year concession period that began in 2004.
This transition, which follows the government’s decision not to renew Umeme’s contract, is set to reshape the landscape of electricity distribution in Uganda.
The handover occurred amidst a backdrop of extensive preparations by UEDCL, which invested in the necessary infrastructure and talent management to ensure a seamless transition. UEDCL has embarked on substantial recruitment efforts, with almost all of its newly approved staff structure of 2,712 in place as of January 2025.
Following regulatory approvals, UEDCL received licenses and necessary tariff requirements to operate as the primary distributor of electricity starting December 31, 2024. The transition entails maintaining all operational systems established by Umeme, ensuring that service payment channels, including mobile networks and banks, remain active without interruption.
The former Umeme employees, around 2,200 of whom have been absorbed into UEDCL, are also welcomed back to the utility. This move is seen as a homecoming for many who had initially left UEDCL when the network was concessioned in 2004.
With all equipment reverting to UEDCL and service centers remaining operational, the new management is optimistic about meeting its obligations under the Electricity Regulatory Authority parameters.
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However, as Umeme hands over power facilities to UEDCL, it has announced its intention to formally dispute the buyout valuation issued by the Government of Uganda following the conclusion of an audit by the Office of the Auditor General (OAG).
The government’s final report, presented to Parliament on March 27, 2025, indicated a buyout amount of USD 118.4 million, a figure significantly lower than the USD 234 million initially estimated by Umeme.
Despite raising concerns, Umeme has invoiced for and received the government’s admitted amount of USD 118.4 million but continues to dispute the assessment, particularly regarding additional excluded costs totaling USD 9.7 million. The company has announced that it will issue a formal Notice of Dispute in accordance with its Support Agreement with the government.
Umeme’s Board has reaffirmed its commitment to securing fair compensation for shareholders and expressed optimism that ongoing discussions within a 30-day negotiation period will lead to a resolution. Should talks fail, the matter is expected to be referred to an arbitral tribunal in London.