Following the end of its 20-year electricity distribution concession on March 31, 2025, Umeme has now shifted its focus to the future – beginning with an upcoming Annual General Meeting (AGM) slated for next month.
Patrick Bitature, the company’s chairman, says the AGM will present shareholders with an opportunity to decide what to do with the buyout cash realized from the government of Uganda and possible strategic options for the company’s future.
“We shall have an AGM in May where we will call shareholders, explain what has happened, and then declare whether it’s a dividend or a buyout,” Mr. Bitature noted, when asked how the $118.4 million received from the state before the Uganda Electricity Distribution Company Limited (UEDCL) took over the distribution role, would be split amongst the shareholders.
He added: “The shareholders will ultimately decide whether Umeme remains a going concern or winds up its affairs. Either way, the decision remains in their hands.”
At least 40% of Umeme’s shareholders are Ugandan – including the NSSF (the biggest single shareholder that owns 23% of the stake), some SACCOS plus individuals – while 60% are foreign.
The $118.4m represents the undisputed portion of Umeme’s estimated $234m claim for unrecovered investment in the national electricity distribution network. The balance remains under reconciliation between Umeme and the government, with a 30-day “good faith” negotiation window currently underway.
If unresolved, the matter will proceed to arbitration as provided for in the concession agreement. So, any decision on the case would influence how much foreign direct investment (FDI) and local capital is deployed in the economy, some experts argue.
“The $118m received has been banked and held in trust for our shareholders,” Bitature emphasized. “We are not touching that money. It will be paid out to shareholders in a tax-efficient way – whether as a special dividend or otherwise.”
He also reassured Umeme’s suppliers and stakeholders: “All suppliers will be paid. Anyone with a valid court order will be handled appropriately. We are not running away. We shall stay listed until we have closed every bit. We want to leave on a clean slate.”
Umeme management at the company AGM last year
A shareholder speaks at the 2024 Umeme AGM
In a shareholder update issued on March 30, 2025, the Umeme board repeated its commitment to securing an accurate and fair return for shareholders and outlined intentions to issue a formal notice of dispute to the government of Uganda in accordance with the Support Agreement.
Relatedly, a day later on March 31, 2025, the Uganda Securities Exchange (USE) temporarily suspended trading of Umeme’s stock under Rule 4 of the USE Listing Rules, citing the need to protect investors amidst ongoing speculation around the buyout process and concession conclusion.
The suspension is set to last two weeks, during which Umeme is expected to submit a progress report to the Exchange.
Solid Legacy
For Umeme’s CEO, Selestino Babungi, who took the helm exactly ten years ago on April 1, 2015, the end of the concession marked both the conclusion of a defining chapter and the beginning of a new one for the company.
“I am an extremely happy man,” Babungi reflected. “When I became CEO, we had 650,000 customers, and today we are handing over 2.2 million — all on pre-paid Yaka meters (from only 50,000). Network losses stood at 27% and we have brought them down to 16%. I am handing over a system generating over UGX 2.5 trillion in annual revenue.”
Babungi said that “This is an integrated, digital, and modern utility that is performing. I am satisfied to hand back such a system to the government, considering what Umeme adopted in 2005. Leaving Ernst & Young to join Umeme was not in vain. The record is there. I have truly contributed to the energy sector. Today I leave a very satisfied man.”
Addressing criticism of Umeme’s guaranteed 20% return on investment, he explained that the rate was reasonable given uncertainties such as financing costs, execution, and recovery risks.
“The same pressures will apply to UEDCL as well. To attract private capital, you must offer returns that reflect the risks,” he said.
(L-R) UEDCL MD, Paul Mwesigwa chats with Bitature and Babungi
Going forward, Umeme could take into consideration markets outside Uganda, after attracting interest from regional governments seeking its expertise in reducing energy losses.
“Zanzibar, Somalia, Sierra Leone, Nigeria, Cameroon and Tanzania – they have all come to study our model,” he said. “We may consider these offers, but first we must tidy up at home.”
New Phase
Both Babungi and Bitature expressed optimism about Umeme’s post-concession future.
“We’ve built a very strong brand,” Bitature said. “The shareholders will decide what next — whether to wrap it up or pursue new business opportunities. Either way, Umeme’s track record remains intact.”
The company has also reiterated that it will continue complying with all regulatory obligations and maintain its presence on the USE while final matters are resolved.
On his part, Babungi remains optimistic and committed to leading Umeme into its next phase, saying: “I am still happy at Umeme, and ready to guide the company into a new direction.”
