Government Defends Multibillion Power Deal with Bitature

government defends multibillion power deal with bitature
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The State Minister for Privatization and Investments, Ms. Evelyn Anite, has addressed concerns and defended the recent multibillion-dollar power agreement between the government and businessman Patrick Bitature. This agreement involves the acquisition of Mr. Bitature’s Tororo-based 50-megawatt Electromax diesel power plant. Ms. Anite emphasized the need for preparation to prevent future blackouts, asserting the deal’s significance.

The government, represented by the Ministry of Energy and Mineral Development, recently entered into a five-year power purchase agreement with Bitature. The Memorandum of Understanding (MoU) will be executed between the Uganda Electricity Transmission Company Ltd and Electro-Maxx as part of this agreement.

Ms. Anite clarified that the deal should not be perceived as a bailout. Instead, she highlighted that 60 percent of the government’s budget is allocated to engage with the private sector in various business ventures. This power plant acquisition is not the first of its kind, as the government previously purchased the Jacobsen Elektro power plant from Germany. In this case, due to budget constraints, the government will gradually take over Bitature’s power plant.

Under this arrangement, the details of which remain undisclosed, Mr. Bitature will continue to operate the power plant for five years before transferring it to the government to serve as a standby generator. The Permanent Secretary at the energy ministry, Ms. Irene Batebe, emphasized that the deal aims to ensure preparedness for any future unexpected power shortages.

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Ms. Anite stressed that the government’s intention is to support a local Ugandan entrepreneur, rather than providing a bailout. She reiterated her commitment to facilitating business incentives rather than bailouts.

It is worth noting that Mr. Bitature has faced legal challenges, including a $65.7 million (approximately UGX 244.8 billion) order to repay Vantage Mezzanine Fund II Partnership, a South African investment fund, as ruled by the International Chamber of Commerce Court of Arbitration in London. This legal matter escalated to the London Court of Arbitration after Vantage’s efforts to auction Bitature’s assets were thwarted by Ugandan courts.

Ms. Anite expressed her stance on business support, emphasizing her dedication to helping investors through incentives rather than bailouts.

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