Members of Parliament have given the government the green light to secure a $190 million loan from Stanbic Bank Uganda to finance the buyout of electricity distributor Umeme Limited. The decision came after extensive debate on March 20, 2025, with several MPs raising concerns over discrepancies in the buyout figures and the absence of a final audit report.
The Committee on National Economy, chaired by Hon. John Bosco Ikojo, had earlier advised against approving the loan until the Auditor General completed an assessment to determine the exact buyout cost. However, despite this recommendation, the majority of legislators voted in favor of the loan request.
MPs pointed out inconsistencies in the estimated cost of compensating Umeme, noting that the Electricity Regulatory Authority (ERA) initially projected $225.7 million before revising it to $127.6 million. Yet, the government requested a loan of $190.9 million, leading to calls for greater transparency.
Hon. Charles Tebandeke, who presented the minority report, emphasized the need for Parliament to first review the Auditor General’s findings before committing to the loan. “We cannot approve a loan when the figures keep changing. We need clear accountability before taking on this financial obligation,” he argued.
In response, Minister of State for Finance (General Duties), Hon. Henry Musasizi, urged Parliament to approve the loan without delay, warning that failure to meet contractual obligations on time could result in financial penalties. “The government must compensate Umeme as per the agreement. Any delays could attract interest charges that would increase the overall cost,” he explained.
Maracha County MP, Hon. Denis Oguzu Lee, raised concerns about the government’s lack of an asset register for Umeme, questioning whether all liabilities had been accounted for. “Do we know exactly what we are buying? Are there outstanding tax obligations or compliance issues that may become the government’s burden?” he asked.
Speaker Anita Among acknowledged that the matter had been handled too close to the expiration of Umeme’s concession. “This process should have been initiated much earlier rather than rushing it at the last minute,” she remarked. However, she instructed that only amounts verified by the Auditor General should be disbursed to avoid any potential overpayments.
In a related decision, Parliament also approved two major loans totaling $200 million to support the Uganda Development Bank (UDB). The first, a $100 million facility, will come from the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID). The second, also $100 million, will be sourced from the Islamic Development Bank (IDB) and its affiliates.
However, some MPs expressed concerns that UDB’s funding mainly benefits select individuals rather than providing equal access to all Ugandans. Hon. Godfrey Onzima of Aringa North County questioned whether people in rural areas had fair opportunities to benefit from UDB financing.
Speaker Among echoed these concerns, emphasizing the need for equitable distribution of resources. “We must ensure that these funds are accessible to all Ugandans, not just those in Kampala,” she said.
Minister Musasizi assured lawmakers that a detailed report on UDB’s financing distribution across the country would be presented to ensure transparency.
Hon. Esther Apwoyochan, Woman MP for Zombo District, acknowledged that while UDB had made a significant impact, many regions had yet to benefit from its financial support. “Expanding UDB’s reach will empower more Ugandans and drive economic growth,” she noted.
With the approval of these loans, the government now faces the task of executing the Umeme buyout while ensuring UDB’s resources reach a broader population. However, questions remain about accountability and the handling of public funds in these transactions.
