Umeme Limited has officially raised a dispute with the Government of Uganda over the Buy Out Amount owed at the end of its electricity distribution concession. The disagreement has led to a 30-day extension of the suspension of Umeme’s trading on the Uganda Securities Exchange (USE).
In a public notice issued on April 14, 2025, Umeme revealed that it served a formal Notice of Dispute to the government on April 11, following a resolution by its Board of Directors. The dispute concerns unresolved issues surrounding the Buy Out Amount outlined in the Support and Concession Agreements between the company and the government.
According to Umeme, the step is in line with clauses 9.1 and 9.2 of the Support Agreement, which provide guidelines for resolving such disputes. Both parties are now expected to begin negotiations in good faith, with the aim of reaching an agreement within 30 days from April 11. If no agreement is reached within this period—or any extended timeframe agreed upon by both sides—the matter will be referred to arbitration in London, as provided in the concession terms.
In a separate notice, also released on April 14, the Uganda Securities Exchange confirmed it had extended the earlier two-week suspension of Umeme’s trading counter, which began on March 31. The extension will run for an additional 30 days, meaning trading in Umeme shares is expected to resume on Wednesday, May 14, 2025.
The USE explained that the extension is intended to allow the dispute resolution process to continue without causing disruption to the market. Umeme is still required to meet all listing obligations and submit regular updates to the Exchange during the suspension period.
Investors have been advised to be cautious when dealing in Umeme shares and to seek professional advice, given the uncertainty surrounding the outcome of the dispute.
The dispute follows the expiration of Umeme’s electricity distribution concession on March 31, 2025. The contested Buy Out Amount refers to compensation the company is owed for its unrecovered investments in the power distribution network. Any delays or disagreements in settling this amount could influence Uganda’s broader energy sector plans and transition strategies.
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