Summary:
Minister of State for Finance (General Duties), Hon. Henry Musasizi, urged Parliament to approve the loan without further delay, warning that postponement could jeopardize the transition process and expose the government to financial penalties.
KAMPALA: Parliament on Friday approved the government’s proposal to borrow over $190 million from Stanbic Bank Uganda to finance the Umeme Limited buyout, despite concerns raised by legislators on the Committee of National Economy.
The approval followed a heated debate on Thursday, March 20, 2025, during which Committee Chairperson, Hon. John Bosco Ikojo presented the committee’s recommendation that the government should delay the loan until the Auditor General finalizes 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, this did not happen. Instead, both the majority and minority reports were presented.
Hon. Ikojo emphasized that the Auditor General has yet to determine the final buyout amount. He urged for an expedited reconciliation between the Electricity Regulatory Authority (ERA) and the Uganda Electricity Distribution Company Limited (UEDCL) to establish the final figure before loan approval.
“The Auditor General has not yet determined the final buyout amount. Given the limited time before the end of Umeme’s concession, the Auditor General should work with ERA and UEDCL to finalize the cost and submit it to Parliament,” Ikojo said.
The committee’s reports both majority and minority cautioned against approving the loan, citing inconsistencies in the estimated buyout amount. While ERA initially estimated $225.7 million, this was later revised to $127.6 million, yet the government requested $190.9 million.
Presenting the minority report, Bbale County MP, Hon. Charles Tebandeke, insisted 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 $127 million, yet the request before us is $190 million. This discrepancy is a serious concern,” Tebandeke argued.
However, Minister of State for Finance (General Duties), Hon. Henry Musasizi, urged Parliament to approve the loan without further delay, warning that postponement could jeopardize 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,” Minister Musasizi warned.
Maracha County MP, Hon. Denis Oguzu Lee, raised concerns about 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 fall on the government, who will be held accountable?” Oguzu asked.
Speaker Anita Among criticized the government’s handling of the buyout, stating that the matter should have been addressed much earlier.
“This issue should have been settled long before certainly not just nine days before the concession ends,” she said.
However, Attorney General Kiryowa Kiwanuka defended the timing, arguing that 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 the loan’s approval, warning that Uganda could not afford further delays in resolving the matter.
The Speaker guided that only the amount verified by the Auditor General should be paid out to prevent overpayment.
In a related development, Parliament also approved two major loans to strengthen the financial capacity of the Uganda Development Bank (UDB).
A $100 million facility from the Arab Bank for Economic Development in Africa (BADEA) and the OPEC Fund for International Development (OFID).
Another $100 million loan 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 was not reaching all regions of Uganda.
Speaker Anita Among echoed similar concerns, questioning 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,” she said.
Minister Musasizi assured Parliament that a breakdown of UDB’s financing distribution would be presented to ensure transparency.
Hon. Esther Apwoyochan (NRM, Zombo District Woman Representative) acknowledged the impact of UDB but admitted that not all regions have benefited equally.
“Although not everyone has accessed the funds, financing UDB will empower more Ugandans and expand its reach,” she said.
With these loan approvals, the government is expected to fast-track the Umeme buyout process and expand financial access through UDB, despite lingering concerns from some legislators.
