Umeme has told shareholders that it is engaging government on early concession renewal amid growing pronouncements from public figures, among them President Museveni and rising concern from shareholders and funders.
Speaking during the annual general meeting, Mr Patrick Bitature, the Umeme chairman, told shareholders that the tone of the negotiations for renewal of the concession by government was more cordial than the public pronouncements.
“We are continuing to engage government on an early concession renewal post the 2025 concession. We are optimistic we shall reach a mutually beneficial agreement,” he told shareholders.
Umeme distributes more than 90 per cent of Uganda’s produced power.
However, it has of late enlisted some negative speech from President Museveni, keeping investors in the dark on the future of the concession, which expires in 2025.
The President partly blames the high cost of power on Umeme, which he recently said was concessioned to distribute power without his knowledge and blames the high tariffs on the distributor’s high return on investment.
However, Mr Bitature dismissed claims that the 20 per cent return on investment on the Umeme concession is the cause for the high power tariffs, noting the issue around reduction of power tariffs was an interest of all energy stakeholders.
Mr Bitature said that despite Covid-19-related disruptions, Umeme had transformed in a number of ways through adopting technology for both business and customer operations.
During the meeting, Mr Selestino Babungi, the Umeme managing director, said although the profits had declined, Umeme had managed to complete its capital investment programme worth $75m (about Shs279b) to improve network distribution capacity, supply reliability and operational efficiencies.
Umeme, he said, had during the period ended December 2020 invested in seven substations in Ntinda, Kakiri, Gulu, Mbale, Bombo and Nakawa as well as integrated lines with transmission infrastructure, expanded distribution transformer zones and conversion of 168,000 customers to prepayment metering.
“We shall continue to focus on safety, continuity of electricity supply services, resolution of the regulatory matters, operational and financial performance,” he said.
During the period, Umeme noted the fall in demand for power forced a drop in the company’s profits by Shs26b, closing 2020 at Shs43b.
During the period ended December 2020 Umeme shareholders will receive a dividend payout of Shs19.8b after Shs12.2 per ordinary share was endorsed during the annual general meeting.
According to Mr Patrick Bitature, the Umeme chairman, dividends will be paid out on or about July 19, 2021 to shareholders in the company’s register at the close of business on June 25, 2020.