By Spy Uganda
The Uganda Electricity Transmission Company Limited (UETCL) is under fire from Parliament for failing to recover over UGX500 billion owed by former electricity distributor UMEME Limited—despite the government recently paying the company US$118 million (UGX432.677 billion) as a buyout following the end of its contract in March 2025.
The criticism came during a session of the Committee on Commissions, Statutory Authorities, and State Enterprises (COSASE) on May 28, 2025, while reviewing the Auditor General’s December 2024 report. The report showed UETCL’s receivables had risen to UGX662.840 billion in FY2023/24, up slightly from UGX665 billion in FY2022/23, with the bulk of unpaid funds owed by UMEME.
Makindye West MP Allan Ssewanyana questioned why the government proceeded with the buyout payment without first settling UMEME’s outstanding debt to UETCL.
“In their response, they confirmed that UMEME owes over Shs500 billion, and Shs84 billion of that is overdue by more than 90 days,” Ssewanyana said. “Yet Parliament approved a US$112 million payment to UMEME. How is UETCL handling this?”
UETCL CEO Joshua Karamagi explained that the Power Sales Agreement with UMEME contains safeguards for the government to recover the funds, even post-contract.
“Our commercial relationship with UMEME is governed by a power sales agreement, which provides dispute resolution mechanisms during and after their operations,” Karamagi said. “We are pursuing recovery through these provisions, including arbitration.”
However, Busiro East MP Medard Sseggona dismissed this explanation and criticized UETCL for not taking timely and strategic action.
“You should have acted like a smart creditor, knowing UMEME is a private company that could wind up operations and vanish,” Sseggona said. “You should have flagged this debt to all government agencies dealing with UMEME. When you know a debtor is dying, you lodge a caveat or pursue attachment before judgment.”
Karamagi revealed that UETCL had attempted to block the buyout payment but was constrained by the agreement, which grants UMEME up to 45 days to settle invoices—even on the last day of its operations.
Sseggona, however, questioned why UETCL failed to initiate legal proceedings.
“You knew they were exiting, and yet the debt kept accumulating. What if UMEME fails to pay? Do you think Ugandans won’t hold you accountable?” he asked.
UETCL’s Commercial Manager, Jenkins Miiro, told the committee that UETCL had alerted the Capital Markets Authority and Uganda Securities Exchange about UMEME’s debt, given the company is listed on the stock exchange.
“We are following due process,” Miiro said. “UMEME also claimed the government owed them UGX100 billion for past reconnections. We wrote to the Ministry of Finance and the Ministry of Energy for guidance on that.”
He said UETCL had issued a formal notice of dispute to UMEME and that discussions were ongoing, with the last meeting held just a week earlier. “They do not dispute the debt,” he added.
Still, MPs remained unconvinced. Sseggona pressed further: “You have legal options. What stopped you from filing a suit and attaching their debts? Saying the agreement provides for recovery is just paper. What if they close shop, pay off shareholders, and disappear?”
Karamagi responded, “We did everything within our powers to collect the money. The only alternative would have been switching off UMEME, which would have plunged the country into darkness.”
Sseggona countered, “No one said switch off power. You could have sued and secured a court judgment to protect public funds.”
Elgon North MP Gerald Nangoli questioned the overall competence of UETCL’s management.
“How are you running this entity with UGX662 billion in receivables, up from UGX665 billion the previous year? This is money you should be using to run operations,” he said.
Sseggona added that UETCL appeared more focused on funding salaries and daily operations than debt recovery.
“They collect just enough to pay wages, fuel, and operations. This is unacceptable,” he said. “I’m boiling. This meeting is adjourned. You’ll return with your ministers and the documents we’ve requested. We cannot run a country like this.”
The Committee resolved to summon Energy Minister Ruth Nankabirwa, UMEME officials, and UETCL management for further questioning in June 2025.
