Parliament has approved the government’s proposal to borrow $190.9 million from Stanbic Bank Uganda to finance the buyout of Umeme Limited, despite concerns over inconsistencies in the estimated compensation figures.
The decision came after an intense debate on Thursday, March 20, 2025, during which MPs raised accountability concerns and questioned the timing of the transaction, which comes just days before Umeme’s concession ends.
Presenting the report of the Committee on National Economy, Chairperson Hon. John Bosco Ikojo cautioned against approving the loan before the Auditor General determines the final buyout amount. He noted that while the Electricity Regulatory Authority (ERA) initially estimated the buyout cost at $225.7 million, the figure was later revised to $127.6 million, yet the government is seeking $190.9 million.
“The Auditor General has not yet determined the final buyout amount. Given the urgency, he should quickly reconcile figures with the Electricity Regulatory Authority and the Uganda Electricity Distribution Company Limited (UEDCL) and submit a final cost to Parliament,” Ikojo stated.
Opposition MPs, led by Hon. Charles Tebandeke (Bbale County), pushed for a delay until the audit report is finalized, arguing that approving the loan prematurely raises accountability risks.
“We cannot approve a loan when there are glaring discrepancies. If the latest estimate is $127 million, why is the government requesting $190 million? This is unacceptable,” Tebandeke said.
Despite the pushback, State Minister for Finance (General Duties), Hon. Henry Musasizi, warned that delaying the loan would expose Uganda to financial penalties for failing to compensate Umeme within the agreed timeframe.
“The government is legally bound to make this payment. Any delay will attract interest penalties and could disrupt the transition process,” Musasizi told Parliament.
Attorney General Hon. Kiryowa Kiwanuka defended the timing, saying the concession agreement dictated that the buyout could only happen at the end of the contract.
Hon. Denis Oguzu Lee (Maracha County) criticized the government for failing to process the buyout earlier, questioning whether Uganda had a clear record of Umeme’s assets and liabilities.
“What exactly are we paying for? Do we have an asset register? Are there hidden liabilities such as tax obligations or environmental compliance issues?” Oguzu asked.
Speaker Anita Among echoed concerns over poor planning, stating, “This should have been addressed much earlier, not just nine days before the concession expires.”
However, she guided that only the verified amount by the Auditor General should be paid out to avoid overpayment.
