Africa-Press – Uganda. Parliament’s Budget Committee has approved the Energy ministry’s Shs103.3b supplementary request that includes Shs45.7b as a partial buyout payment to South African utility company, Eskom Uganda Ltd (UEL).
The firm managed Nalubaale and Kira hydropower dams on River Nile in eastern Jinja City for two decades and reverted the control to the Uganda government following the lapse of the concession on March 31.
Uganda Electricity Regulatory Authority (UEGCL) is now managing the power infrastructure on behalf of the government.
The House committee noted that whereas the power regulator, Electricity Regulatory Authority (ERA), determined $18m (Shs66.8b) as due payment to Eskom, the firm be paid Shs45b, pending the outcome of the Auditor General’s audit.
Eskom Ltd’s managing director Thozama Gangi told this newspaper last evening that the deadline for their pay is April 30, 2023, slightly over a fortnight from today.
“The buy-out amount is governed by the Support Agreement which is between EUL and the Ministry of Finance…the government of Uganda has committed to fulfilling that obligation and Eskom has no basis to doubt that commitment,” she said.
Members of Parliament recommended that after paying the Shs45.7b, and subject to the Auditor General’s final assessment of Eskom’s financial claim, the balance be provided in the next financial budget that starts on July 1.
Excom’s Gangi said their 20-year concession, which expired on March 31 is governed by four key agreements; the Concession and Assignment Agreement with UEGCL, Power Purchase Agreement with UETCL, Support Agreement with Finance, and the Generation Licence with ERA.
“The agreements specify the obligations of each of the named parties including when payments are to be executed,” she added.
The Ministry of Energy officials yesterday declined to discuss the matter.
However, their political supervisor, Ms Ruth Nankabirwa, last month tabled a request of Shs70.8b to pay off Eskom and another Shs26.4b as start-up capital for UEGCL, which has inherited the dams.
We were unable to establish whether the delayed clearance of Eskom’s buyout carries a surcharge.
UEGCL took over management of the Nalubaale and Kiira dams on April 1 following the expiry of Eskom’s 20-year concession signed on November 26, 2002.
The takeover is part of reforms of the sub-sector resulting from the Electricity (Amendment) Act, 2022, and aims to consolidate electricity generation, transmission, distribution, and regulation into the hands of the government turning its back on privatisation.
President Museveni, who came to power in 1986 as a Marxist and shortly afterward imbibed Bretton Woods institutions’ liberalisation policies wholesale, has lately been vocal that contracted players in the electricity sector are extortionate commission agents and make power needlessly expensive.
Umeme issue
At the crosshairs of his assault is Umeme, the national power distributor, whose concession he has argued will not be renewed while separately directing that power from generation be directly taken to industrial parks.
The new outfit to house different components of electricity – generation, transmission, distribution and regulation – has been named the Uganda National Electricity Company (UNEC).
Based on a March 26 independent engineer’s assessment, this newspaper detailed how Nalubaale and Kiira dams required urgent repairs or overhauls in order to stabilise the power plants’ operational efficiency and avert possible flooding.
But Eskom’s management told this newspaper last evening that they are not aware of such defect warnings. “If they exist, then this would be an unfair and unfounded allegation…” Ms Gangi said.
Umeme takeover
Energy ministry Permanent Secretary Irene Bateebe on Tuesday told the parliamentary Natural Resources Committee that as of December 2023, ERA had evaluated that pay-out due to Umeme is $215m (Shs798b). The contract of the power distributor lapsed in March 2025. A final figure of claimable investment expenses will be informed by findings by the Auditor General.
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