Umeme to Seek Arbitration in London Over Shs 10.62tn Claim Against Uganda Govt

Ugandan electricity distributor Umeme Limited has announced its intention to pursue international arbitration to recover a disputed sum of Shs.1.062tn from the Government of Uganda. The move follows unsuccessful negotiations regarding the final buyout amount after the conclusion of Umeme's concession.

In a public notice issued today, June 2, 2025, Umeme's Board of Directors informed shareholders and the public that while "good faith negotiations" were held with the government from May 2nd to May 20th, 2025, "no resolution was reached on the payment of Umeme's entire claim."

The company acknowledged that the government had already paid an "admitted Buy Out Amount of USD 118 million." However, Umeme maintains that an additional Shs1.062tn is still outstanding. The notice stated, "Although the negotiations were able to resolve and agree on certain amounts as payable, and which amounts will be paid by the Government after the 31st day of May 2025, no resolution was reached on the payment of Umeme's entire claim."

Umeme had formally issued a Notice of Dispute on April 11, 2025, expressing dissatisfaction with the initial buyout amount calculated by the government.

The company further clarified that its claim could be reduced pending the outcome of an ongoing audit by the Office of the Auditor General into Umeme's 2025 investments.

"The Office of the Auditor General is currently conducting an audit of the Company's 2025 investments," the statement read, adding that these are "investments which once admitted and paid by the Government would lead to a reduction in the claim."

Despite this, Umeme has resolved to take the matter to arbitration in London, as stipulated in their Concession Agreements.

"In the interests of the shareholders and the investing public, the Company resolved to and will proceed to pursue the full recovery of all outstanding sums due through Arbitration in London," the notice declared.

It added that the "Arbitration Dispute Reference shall be served upon the Government in the coming days in order to commence the Arbitration process."

In related news, Umeme also announced a further delay in the publication of its financial statements for the year ended December 31, 2024. Citing the "delayed good faith negotiations and ongoing reconciliations," the company has sought and received an extension from the Uganda Securities Exchange.

The financial results are now expected to be published by June 12, 2025.

Consequently, the notice confirmed, "the involuntary suspension of the counter has been extended until the 12th day of June 2025."

The announcement was made under Rule 36 of the Uganda Securities Exchange Listing Rules 2025 and Regulation 89 (2) of the Capital Markets (Public Offers, Listings and Disclosures) Regulations 2023 of Kenya.