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Umeme Speaks Out On Museveni’s Directive Not To Renew Its Contract

Umeme Limited has spoken out on President Yoweri Museveni’s letter asking Energy Ministry to look for a cheaper alternative of power distribution.

In a letter dated March 13, 2018, Museveni  tasked Energy Minister Irene Muloni to explain to him how Umeme’s technical losses still remain as high as 17% yet the company claims to have invested up to $500million in distribution infrastructure to address this problem.

“There should be no question of renewing Umeme’s concession. Let us look for a cheaper way of modernizing and expanding the transmission and distribution lines,” Museveni said. This directive comes at a time when Umeme says it plans another &1.5billion in distribution infrastructure.

In response to Museveni’s letter, Umeme through Shonubi, Musoke & Co. Advocates (the Company Secretary) says that it is not a recipient of the said letter.

However, Umeme says being a public Company with dual listing on the Uganda Securities Exchange and the Nairobi Securities Exchange and in accordance with the disclosure requirements under the Uganda Securities Exchange (USE) Listing Rules, 2003 (as Amended) and The Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002 of Kenya, the Company is obligated to disclose to the general public and comment on any circumstance or event that is likely to have a material effect on its financials or which might reasonably be expected to have a material effect on market activity in the prices of its securities.

 ALSO READ: Why Umeme Contract Is Bad For Ugandans, Good For Shareholders

“Umeme is operating a 20 – year Concession to distribute and supply electricity until 1st March 2025 and confirms that it has seven (7) years left under the existing Concession,” Umeme says, adding: “The Company commenced engagement with the Government of Uganda on the extension of the Umeme Concession period. This engagement process is still ongoing and further comment on the same is premature at this point. The Company shall provide timely updates as required under its continuing listing obligations.”

Umeme adds that it is committed to working with the Government of Uganda, all key stakeholders and its development partners to ensure the development and improvement of the electricity distribution sector.

 

Taddewo William Senyonyi
https://www.facebook.com/senyonyi.taddewo
William is a seasoned business and finance journalist. He is also an agripreneur and a coffee enthusiast.

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