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Parliament approved the government’s proposal to borrow over US$190 million from Stanbic Bank Uganda for the buyout of Umeme Limited, despite concerns raised by the Committee of National Economy.
The approval followed a heated debate during which the Committee Chairperson, John Bosco Ikojo, presented the recommendation that the government should not proceed with the loan until the Auditor General finalises his report on the exact buyout amount.
Although Attorney General Kiryowa Kiwanuka sought to suspend the rules to allow the House to process the loan request without debating the report, both reports were presented.
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“The Auditor General has not yet determined the final buyout amount. Given the remaining time before Umeme’s concession ends, the Auditor General should urgently reconcile with the Electricity Regulatory Authority (ERA) and Uganda Electricity Distribution Company Limited (UEDCL) to determine the final cost and submit it to Parliament,” Ikojo said.
Both the majority and minority reports in the committee raised concerns about approving the loan due to inconsistencies in the estimated buyout amount. While ERA initially estimated US$225.7 million, this was later revised to US$127.6 million, yet the government sought US$190.9 million.
Charles Tebandeke, MP for Bbale County, who presented the minority report, argued that approving the loan without the Auditor General’s final figures raised serious 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,” he stated.
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However, Minister of State for Finance, Henry Musasizi, urged Parliament to approve the loan without further delay, warning that any postponement could 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,” Musasizi said.
Denis Oguzu Lee, MP for Maracha County, questioned whether the government fully understood what it was buying, citing the absence of an asset register.
“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 noted that the government had left the buyout to the last minute, saying, “This matter should have been addressed much earlier, not just nine days before the concession ends.”
However, Attorney General Kiwanuka defended the timing, stating that the nature of the concession agreement only allowed the buyout to take place at the end of the contract.
Okiror John Bosco (NRM, Usuk County, Katakwi) called for the loan’s approval, saying Uganda could not afford delays in settling the matter. The Speaker guided that only the amounts 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 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, Godfrey Onzima (Aringa North County MP) raised concerns that UDB’s financing benefits only a few Ugandans and does not reach all regions. 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,” she added.
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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 these loan approvals, the government is expected to expedite the Umeme buyout process and enhance financial access through UDB, despite lingering concerns from some legislators.