Umeme suspension on USE hits investors

Business reporter in Kampala, Uganda

Nation Media Group

Umeme’s continued suspension from the Uganda Securities Exchange (USE) trading floor has deepened uncertainty among investors amid lack of consensus between the power distributor and government over the final buyout amount and legal transfer of property leases to Uganda Electricity Distribution Company Ltd.

The company’s 20-year electricity distribution agreement expired on March 31, 2025, following the government’s decision not to renew its commercial contract.

“Umeme Limited entered the industry at a difficult time when power cuts had become a nightmare to us, but has excelled on the job. It is therefore unfair for the government to indulge in a breach of its contractual obligations. This situation will affect future financing arrangements in the power sector. For example, if the government chooses to borrow money for the expansion of UETCL’s network tomorrow, many investors would choose to either demand a higher interest rate on a loan facility or refuse to provide the loan altogether. Umeme Limited also made certain politically driven investments in the final year of its concession agreement in some areas, and failure to recognise them would lead to a loss of around $100 million against its buyout amount,” said an energy industry executive who requested anonymity, citing confidentiality rules.

Umeme suspension on USE hits investors

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