Trading resumed today (13 June) in the shares of Ugandan power distributor Umeme after the Ugandan Securities Exchange ended a suspension in trading the shares. This comes after the company launched a dispute with the Ugandan Government over the amount of payout after the Government failed to renew its 20-year operating concessions when they expired in March 2025.
On 31 March, the Government-run Uganda Electricity Distribution Company Limited (UEDCL) officially took over the electricity distribution network from Umeme. The Government said it had been slow to expand connections and lower prices for consumers, according to this story on Reuters. The Government paid Umeme shareholders $118m in compensation.
On 2 June, Umeme announced that talks with Government had failed to reach agreement over a further $292m in compensation claimed for its shareholders. It has launched a claim for the balance of the claimed compensation at the London Court of International Arbitration, per this story on African Energy website, as laid out in the concession agreement. Umeme claims the business was worth $410m, but the Government says it paid a fair price.
The Uganda Securities Exchange today published a notice: “ .. the involuntary suspension instituted on Umeme Limited on 31 March 2025 and further extended to 12 June 2025 has been lifted. Trading on the Umeme counter has been restored effective 13 June 2025 following expiry of the involuntary suspension, and publication of the financial statements for the year ended 31st December 2024. While trading has resumed, investors are advised to exercise caution and make informed decisions when dealing in shares of Umeme Limited.”
Umeme will keep shareholders informed in a timely manner of developments in the arbitration case.
Trading had also been suspended on the Nairobi Securities Exchange, but we did not find an announcement at time of writing.
The results for the year to 31 December 2024 were also published today (13 June) and the large provisions made for the end of its distribution concession have resulted in a pre-tax loss of UGX 602.7 billion ($167m). This compares with a pre-tax profit of UGX 15.4 billion in 2023 and UGX 214.9bn in 2022.
According to this analysis on Kenyan Wall Street website, “Umeme delivered a solid operational performance. It increased revenue by 5.4% to UGX 2.31 trillion, driven by a 10.8% rise in electricity demand and a 14.5% growth in grid connections. Gross profit rose by 10.1% to UGX 822 trillion. The company also reduced energy losses to 16.0%—its best level in two decades, down from 38% at the start of the concession.
“Umeme generated UGX 292bn in positive operating cash flow, though this was down from UGX 461bn in 2023 due to payment delays and transition-related costs. It invested UGX 107bn in infrastructure and technology upgrades. However, the board opted not to declare a dividend for FY2024, following a UGX 54.2 per share payout the prior year.”
The website added: “Umeme generated UGX 292bn in positive operating cash flow, though this was down from UGX 461bn in 2023 due to payment delays and transition-related costs. It invested UGX 107bn in infrastructure and technology upgrades. However, the board opted not to declare a dividend for FY2024, following a UGX 54.2 per share payout the prior year.”
The website notes that the 2024 net loss was UGX 511bn. According to the company’s financials on the Financial Times website, net income after taxes was UGX 11.5bn in 2023, down from UGX 148.2bn in 2022 and UGX 139.1bn in 2021.
According to previous news reports, the company had sought $231m in compensation and the preliminary assessment by Uganda’s Auditor General came in at $201m, before the final report from the Office of the Auditor General put the figure at $118m, with a further $9m to be paid once ongoing projects are completed. In March, Parliament approved that Government could take a loan of $190m from Stanbic Uganda to pay for the buyout.
Previous studies, including the 2015 report People, Power, Planet (accessible on the Sustainable Energy for All website) by the former Africa Progress Panel, identified a stranglehold by inefficient and sometimes corrupt state utilities as holding back development including reliable energy supply and access to power across Africa. However, governments have not advanced the involvement of private partners in many cases, believing they can do the job better.
(Photo credit: Lumppini, Depositphotos)