Uganda Borrows Shs270 Billion Less for Umeme Buyout After Audit

Uganda's government significantly reduced its borrowing for the buyout of electricity distributor Umeme Company Limited, saving approximately Shs270 billion. This reduction stems from an assessment by the Auditor General, which lowered the total amount required for the transaction at the end of Umeme's 20-year concession.

Parliament had initially authorized the government to borrow up to the euro equivalent of US$190.99 million, roughly Shs711 billion. However, the government ultimately borrowed US$118.39 million, approximately Shs440 billion. This means the government did not utilize about US$72.6 million, or nearly 38 percent, of the borrowing ceiling approved by Parliament.

A report submitted to Parliament by the Minister of State for Finance, Planning and Economic Development, Shartsi Kutesa Musherure, details the financing and utilization for the buyout. The report, dated August 12, 2026, and signed by Finance Minister Henry Musasizi, explains that only the amount recommended by the Auditor General was borrowed and paid to Umeme.

Parliament had stipulated that the government should only pay the amount verified or recommended by the Auditor General before March 31, 2025. It also mandated that any unused balance from the authorized borrowing ceiling would be canceled and not added to Uganda's public debt. The Finance Minister was required to report back to Parliament on the actual amount paid.

Despite the reduced immediate borrowing, the financial dispute surrounding Umeme's exit is not entirely over. The company has reserved its right to seek reconciliation for the final buyout amount, supplementary payments, damages, and interest. This could lead to further financial obligations for the government, depending on the outcome of ongoing negotiations or dispute-resolution processes.

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Only USD 118,385,603 recommended by the Auditor General as payout to UMEME Limited was borrowed by the Government, and paid to UMEME Limited within the conditions set out in the Parliamentary Resolution.