Parliament has approved the government’s proposal to borrow over US$190 million from Stanbic Bank Uganda for the Umeme Limited buyout despite concerns raised by legislators on the both the Committee of National Economy.
The approval followed a heated debate on Thursday, 20 March 2025 during which Committee Chairperson, Hon. John Bosco Ikojo presented the committee’s recommendation that the government should not proceed with the loan until the Auditor General finalises his report to establish the exact buyout amount.
Althought the Attorney General Kiryowa Kiwanuka sought for the suspension of the rules to allow the House process the loan request without debate of the report, this did not happen as both reports saw the light of day.
“The Auditor General has not yet determined the final buyout amount. Given the remaining time before the end of Umeme’s concession, the Auditor General should expeditiously reconcile with the Electricity Regulatory Authority (ERA) and Uganda Electricity Distribution Company Limited (UEDCL) to establish the final cost and submit it to Parliament to guide the loan approval,” Ikojo said.
The committee members in both the majority and minority reports cautioned against approving the loan, citing inconsistencies in the estimated buyout amount.
While the Electricity Regulatory Authority initially estimated US$225.7 million, this was revised to US$127.6 million yet the government sought US$190.9 million.
Bbale County MP, Hon. Charles Tebandeke who presented the minority report, insisted that approving the loan without the Auditor General’s final figures raised accountability concerns.
“We should not approve a loan when ERA now estimates the buyout at US$127 million yet the request before us is US$190 million. This discrepancy is a serious concern,” Tebandeke argued.
However, the Minister of State for Finance (General Duties), Hon. Henry Musasizi urged Parliament to approve the loan without further delay warning that any postponement would jeopardise the transition process and expose the government to financial penalties.
“The government is legally obligated to compensate Umeme and failure to do so within the agreed timeframe will attract heavy interest penalties,” he said.
Maracha County MP, Hon. Denis Oguzu Lee expressed concern over the lack of an asset register, questioning whether the government fully understood what it was buying.
“What are the assets and liabilities of Umeme? Are there outstanding tax obligations or environmental compliance issues? If these liabilities come to the government, who shall we hold accountable?” Oguzu asked.
Speaker Anita Among said the government handled the buyout too close to the deadline, stating that, ‘this matter should have been addressed much earlier, not just nine days before the concession ends’.
However, Attorney General, Hon. Kiryowa Kiwanuka defended the timing, arguing that the nature of the concession agreement dictated that the buyout could only take place at the end of the contract.
Hon. Okiror John Bosco (NRM, Usuk County, Katakwi) called for approval of the loan saying Uganda could not afford delays in settling the matter.
The Speaker guided that only the monies verified by the Auditor General should be paid out to ensure no overpayment.
In a related development, Parliament also approved two major loans to capitalise the Uganda Development Bank (UDB).
The House authorised a US$100 million facility from the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID) to strengthen UDB’s financial capacity.
Another US$100 million loan was also approved for UDB to secure funding from the Islamic Development Bank (IDB), the Islamic Corporation for the Development of the Private Sector (ICD), and the International Islamic Trade Finance Corporation (ITFC).
However, Hon. Godfrey Onzima (Aringa North County MP) raised concerns that UDB’s financing only benefits few Ugandans and not reaching all regions of the country.
Speaker Among echoed similar concerns wondering whether Ugandans outside Kampala have equal access to UDB’s funds.
“We need equity in the distribution of these funds. It should not mean that other regions do not qualify. The sectoral committee should ensure fairness in these loans,” Among added.
Musasizi assured Parliament that a breakdown of UDB’s financing distribution across the country will be presented to ensure transparency.
Hon. Esther Apwoyochan (NRM, Zombo District Woman Representative) praised UDB’s impact but acknowledged that not all regions have benefited equally. “Although not everyone has accessed the funds, financing UDB will empower Ugandans and expand its reach,” she said.
With the approval of these loans, the government is expected to fast-track the Umeme buyout process and enhance financial access through UDB, despite lingering concerns from some legislators.
