Parliament has summoned officials from the Ministry of Finance, Planning and Economic Development to explain questions surrounding the financing of the government’s buyout of Umeme Limited following concerns over differences between the amount approved for borrowing and the money eventually paid to the former electricity distributor.

The Public Accounts Committee (PAC) issued the summons after receiving a briefing from the Ministry of Energy and Mineral Development on the conclusion of Umeme’s electricity distribution concession and the government’s assumption of the distribution network.

The committee is seeking clarification over the gap between the USD 190.9 million borrowing approved by Parliament and the approximately USD 126.4 million ultimately paid after completion of the Auditor General’s verification process.
PAC Chairperson Patrick Oshabe Nsamba said legislators want a complete account of the loan, including the amount borrowed from Stanbic Bank, how much was disbursed, and the utilisation of any remaining funds.

He noted that Parliament has reviewed several audit reports relating to the Umeme concession and intends to conduct a comprehensive examination of the entire buyout process before drawing conclusions.

Appearing before the committee, Permanent Secretary in the Ministry of Energy, Eng. Irene Bateebe, explained that the payment made to Umeme was not compensation but reimbursement for investments the company had made in Uganda’s electricity distribution network that had not yet been recovered through electricity tariffs.

She said the arrangement was provided for under the concession agreement signed in 2005, which required the Office of the Auditor General to independently verify the value of the unrecovered investments before the concession expired.

According to Bateebe, the audit process began in April 2024 and initially estimated the buyout at USD 190.9 million.

Based on that preliminary assessment, Cabinet authorised the Ministry of Finance to secure financing, and Parliament later approved the borrowing.

However, after additional financial, technical and legal verification, the Auditor General’s final report reduced the certified amount payable to about USD 118 million.

Government settled that amount shortly before the concession officially ended.

She added that a subsequent review of projects completed during the final months of the concession resulted in an additional payment of approximately USD 8.4 million, bringing the total amount paid to about USD 126.4 million.

Bateebe told lawmakers that the difference between the approved borrowing limit and the final payment resulted from the evolving audit process, which continued until the concession expired.

She also defended government’s decision to settle the verified amount before resolving outstanding disputes with Umeme, arguing that delaying payment could have disrupted the transfer of electricity distribution operations to the Uganda Electricity Distribution Company Limited (UEDCL) and exposed government to significant financial penalties.

According to the concession agreement, delayed payment would have attracted interest charges after specified periods, increasing the financial burden on taxpayers.

Despite the explanations, committee members maintained that government must fully account for every dollar authorised by Parliament, regardless of the final buyout value.

Lawmakers stressed that transparency and accountability require a clear explanation of the loan agreement, the amounts drawn down, and the status of any unused funds.

The committee also turned its attention to another financial matter involving the Ministry of Energy and the Uganda Electricity Transmission Company Limited (UETCL).

Members ordered both institutions to reconcile conflicting records relating to more than Shs132 billion associated with the Rural Electrification Levy after inconsistencies were identified during examination of the Auditor General’s report.

Parliament directed the two entities to harmonise their financial records before the committee completes its review.

The ongoing investigations reflect Parliament’s heightened oversight of Uganda’s energy sector following Umeme’s exit and the government’s ongoing reforms aimed at strengthening electricity distribution and expanding access to power across the country.

The Ministry of Finance is expected to appear before the committee with detailed documentation to explain the borrowing arrangements and account for the utilisation of all funds approved for the Umeme buyout.