Uganda estimates it will pay power distributor Umeme Limited about $225 million to allow the utility to recoup its investments in the national grid after its concession ends in March 2025. Umeme has been running a 20-year power concession in Uganda that started in 2005.
Reuters reports that the Ugandan government declined the firm’s request to extend its concession when it ends next year. This will require the government to pay Umeme all unrecovered capital investments when the agreement ends.
“Today we do have an idea of how much the buy-out amount is … approximately we are in the tune of about $225 million,” Irene Batebe, the permanent secretary for the ministry of energy and mineral development told broadcaster NTV Uganda late on Wednesday night.
Batebe added the government’s auditor general would do a final review of Umeme’s investments in the national power grid to determine a final amount to be paid out to the firm.
The government plans to contract a private company for a joint venture with the state-owned Uganda Electricity Distribution Company Limited (UEDCL) to operate the grid after Umeme’s concession ends.