Uganda Secures $190 Million Loan for Umeme Buyout

Uganda's parliament has approved a $190 million loan request from Stanbic Bank to compensate power distributor Umeme Limited. The company, with monopoly rights since 2005, will not have its concession renewed. The government is obligated to compensate Umeme for unrecovered investments based on the concession terms.

Uganda's legislative body has sanctioned a government initiative to borrow $190 million from Stanbic Bank. The funds will be used to compensate Umeme Limited, a dominant power distributor, for investments not recouped following the end of its concession period.

The concession, which commenced in 2005, granted Umeme the exclusive rights to distribute electricity throughout Uganda. However, with the concession set to cease at month's end, the government confirmed the license will not be renewed.

Under the agreement's conditions, the government is compelled to reimburse Umeme for any infrastructure investments that remain unrecovered as the concession concludes.

(With inputs from agencies.)