KAMPALA (Reuters) – Ugandan private power utility Umeme Limited said on Monday it had received $118 million in compensation from the government for unrecovered investments, following the expiration of its monopoly rights to distribute electricity in the country.
Umeme signed a 20-year concession agreement in 2005. But as it was nearing its end in 2022, the government rejected Umeme’s request to renew the deal amid complaints it had been slow to expand new power connections and lower prices for consumers.
Under the terms of Umeme’s agreement, the government is required to compensate the company for any capital investments in the power distribution network that it had not recovered by the end of the concession period.
Umeme said in a statement that Monday’s payment represented what government auditors determined the company was owed.
Umeme, however, is claiming $234 million in total unrecovered investments.
It said its board remained “optimistic that the matters in dispute will be resolved during the ensuing 30-day good faith negotiations period or in any event subsequently by an arbitral tribunal in London.”
A spokesperson for Uganda’s energy ministry was not immediately reachable for comment.
Umeme’s concession ended on Monday. The monopoly will now be returned to the state-owned Uganda Electricity Distribution Company Limited.
(Reporting by Elias Biryabarema; Editing by George Obulutsa and Joe Bavier)
