- Minister recommends halt to new investments in UMEME
- Concession ends in 2025
- UMEME is seeking a renewal of the concession
The Ugandan Minister of State for Energy and Mineral Development, Sidronius Okaasai Opolot, has recommended that the electricity distribution concessionaire, UMEME halts new investments as its 25-year concession draws to an end. UMEME’s concession license is billed to expire in 2025.
Okaasai made the recommendation during a meeting with the Committee on Environment and Natural Resources to scrutinise the budget framework for the 2022/2023 financial year.
”To manage the concession buyout and minimise suffocating expenditure of Government when the Umeme concession ends, it is important that additional investments by Umeme be regulated and or halted to reduce on the final buyout amount,” Okaasai said.
UMEME wants to renew its distribution concession; however, the Ugandan government is looking to change the finance structure of the utility from private to public to allow for a reduction in high electricity tariffs.
“The high costs are driven by the private sector participation, especially generation. Public financing of electricity generation, transmission, and distribution will be required if the final consumer prices are to be reduced in the medium to the long term,” Okaasai said.