Parliament’s Public Accounts Committee (PAC) has summoned officials from the Ministry of Finance, Planning and Economic Development to explain discrepancies surrounding the financing of the Umeme buyout after lawmakers questioned what happened to the balance of a loan approved by Parliament.
The committee raised concerns after officials from the Ministry of Energy and Mineral Development disclosed that Parliament had approved borrowing up to USD 190.9 million (about UGX 710 billion) for the buyout, yet the government ultimately paid a significantly lower amount.
Appearing before the committee on Monday, the Permanent Secretary in the Ministry of Energy, Eng. Irene Bateebe, outlined the process that led to the end of Umeme’s 20-year electricity distribution concession in March 2025 and the government’s settlement of the buyout.
Bateebe explained that under the support agreement signed before the concession commenced, the Office of the Auditor General was mandated to conduct financial, legal, technical and environmental audits to determine the final amount payable to Umeme.
She emphasized that the payment was not compensation but reimbursement for investments the company had made in the electricity distribution network that had not yet been recovered through electricity tariffs approved by the Electricity Regulatory Authority.
“The buyout amount represented investments that Umeme had made over the concession period but had not recovered through the tariff. It was not compensation,” Bateebe told the committee.
According to the ministry, the Auditor General began the verification exercise in April 2024. A draft audit report released in January 2025 estimated the buyout at USD 190.9 million, while Umeme submitted its own valuation of USD 235.98 million to the Ministry of Finance.
Based on the Auditor General’s preliminary findings, Cabinet approved borrowing up to USD 190.9 million from Stanbic Bank to finance the buyout, and Parliament subsequently approved the loan in March 2025.
However, after further verification, the Auditor General’s final report issued on March 26, 2025 reduced the verified buyout amount to about USD 118 million (approximately UGX 441 billion). Government settled that amount two days later.
Bateebe further revealed that an additional audit covering work completed between January and March 2025 resulted in a further USD 8.4 million payment, which government made on June 30, 2025.
She attributed the difference between the approved borrowing and the actual payout to the evolving audit process, which involved continuous verification and reconciliation of investments made over the life of the concession.
The Permanent Secretary also defended government’s decision to pay Umeme before resolving outstanding financial disputes, saying withholding payment would have complicated the transfer of electricity distribution operations to the Uganda Electricity Distribution Company Limited (UEDCL).
She said Umeme had contested the Auditor General’s valuation and maintained it was entitled to a higher amount. Government therefore prioritized completing the transition before allowing the disputed claims to be resolved through arbitration.
According to Bateebe, efforts to reach an amicable settlement failed, prompting Umeme to commence arbitration proceedings in London as provided for under the support agreement. UEDCL has also initiated separate arbitration proceedings over money it says Umeme owes.
She warned that delaying the buyout payment would have exposed government to hefty penalties under the agreement, including interest of 10 percent after 30 days and up to 20 percent for delays exceeding 90 days after the concession expired.
Despite the explanation, PAC Chairperson Patrick Oshabe Nsamba questioned what happened to the balance after Parliament approved borrowing nearly USD 191 million, yet government paid only about USD 126.4 million, including the additional payment made in June.
Nsamba said the committee had received several Auditor General’s reports relating to the Umeme concession and would dedicate another sitting to comprehensively scrutinize the entire buyout process.
PAC directed the Ministry of Finance to appear before the committee and explain how much money was actually borrowed from Stanbic Bank, how much was disbursed for the buyout, and account for any unutilized balance.
In a separate audit matter, the committee also ordered the Ministry of Energy and Mineral Development and the Uganda Electricity Transmission Company Limited (UETCL) to reconcile conflicting financial records after lawmakers identified inconsistencies involving more than UGX 132 billion in unpaid rural electrification levy funds.
The query arose after legislators noted that the Ministry of Energy’s financial statements reflected UGX 121 billion as receivable from UETCL, while the utility’s own financial records did not recognize the liability, prompting PAC to demand a reconciliation of the figures.
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