Negotiations between Umeme Ltd, Uganda’s electricity distribution company, and the government of Uganda have failed to yield results, prompting the company to seek legal avenues to recover funds it claims are owed.

Following the expiration of Umeme’s 20-year concession and the government’s decision not to renew it, the company is entitled to reclaim investments that have not yet been recouped, as per the concession agreement.

While the government has agreed to pay $118 million, an additional $9 million is still under verification. However, Umeme is demanding a total of $293 million, expressing dissatisfaction with the buyout amount computed and paid by the government. As a result, the company formally issued a notice of dispute on April 11, 2025.

Failed Negotiations Lead to Arbitration

The two parties engaged in “good faith negotiations” between May 2 and May 9, 2025, with an extension to May 20. However, the discussions did not resolve the impasse, leading Umeme to initiate arbitration proceedings in London, UK.

In an official statement, Umeme confirmed:

"Although negotiations resulted in agreements on certain payments, no resolution was reached on the full claim. The outstanding amount remains at $292 million, exceeding the $118 million buyout figure already paid by the government."

The Office of the Auditor General is currently auditing Umeme’s 2025 investments, which may reduce the total claim once verified and approved. Nonetheless, the company maintains that it will proceed with arbitration to recover the full amount.

"In the interest of shareholders and the investing public, the company has resolved to pursue full recovery of all outstanding sums through arbitration in London, as stipulated in the concession agreements," Umeme stated.

Share Trading Suspended

As arbitration proceedings commence, trading in Umeme Ltd shares on the Uganda Securities Exchange (USE) remains suspended for another 12 days, with the delay extending to June 12, when the company’s financial statements for 2024 are expected to be released.

The suspension also affects trading on the Nairobi Stock Exchange, where Umeme’s shares are cross-listed.

"Due to the delayed negotiations and ongoing reconciliations, USE has approved Umeme’s request for an extension to release its financial statements for the year ending December 31, 2024, now scheduled for June 12, 2025," the statement reads.

During the suspension, the company will continue to comply with listing obligations and submit progress reports regarding the situation and next steps.