Uganda: Why Govt Borrowed Shs270 Billion Less for Umeme Buyout

What the report says

Uganda’s government borrowed less than Parliament had originally permitted for the buyout of Umeme Limited, the electricity distributor that ended a 20-year concession. According to the report distributed by AllAfrica from The Independent in Kampala, the state avoided about 270 billion shillings in additional debt after the Auditor General’s review lowered the verified payout amount.

Parliament had approved borrowing up to the euro equivalent of US$190.99 million, or about 711 billion shillings at the time, but the government ultimately drew the equivalent of US$118.39 million, roughly 440 billion shillings. The Finance Ministry said the loan was used to pay the amount recommended by the Auditor General and that the unused portion of the borrowing authority was not converted into public debt, in line with Parliament’s conditions.

The report says the borrowing process followed a special audit completed in March 2025 and a later financing arrangement with Stanbic Bank Uganda Limited and Standard Bank of South Africa Limited. It also notes that Parliament required the government to return with a report on the final amount paid. The development matters because it shows how audit findings and parliamentary controls can limit public borrowing in major privatization or concession buyout cases.

Even so, the article says the Umeme exit may not be fully settled. Umeme reportedly kept the right to seek reconciliation, supplementary payments, damages or interest, leaving open the possibility of further financial claims depending on future talks or dispute-resolution steps.