Kampala, Uganda – June 2025:
Electricity distributor Umeme Ltd has taken the Government of Uganda to an international arbitration court in London, following a breakdown in talks over compensation at the end of the company’s 20-year concession.
Umeme, whose shareholders include British and South African investors, is seeking to recover what it claims is an unpaid balance of $293 million, representing unrecovered investments made during its concession period, which officially ended in March 2025.
What’s the Dispute?
Under the 2005 concession agreement, the government was obligated to reimburse Umeme for investments made in Uganda’s electricity distribution infrastructure that had not been recovered through tariffs or revenue.
The government agreed to pay $118 million after an internal valuation, and an additional $9 million is still under verification. However, Umeme insists its audited records justify a claim of $293 million, nearly triple the amount acknowledged by the state.
Despite months of negotiations, both sides failed to reach a settlement. Now, Umeme has opted for legal redress by filing for international arbitration in London, the designated venue under the concession terms.
UEDCL Takes Over
With Umeme’s exit, the Uganda Electricity Distribution Company Limited (UEDCL), a state-owned entity, has officially taken over electricity distribution operations. The transition marks a full return to public management of power distribution for the first time in two decades.
UEDCL has reassured the public of a smooth handover, but stakeholders are watching closely to see how the government navigates the arbitration case, which could affect investor confidence and the energy sector’s financial stability.
