Umeme Limited has issued a profit warning announcement, informing shareholders and the public that the company will likely register a loss for the year ended December 31, 2025.
In a notice dated January 29, 2026, the company states that this follows a prior loss for the year ended 2024 and is primarily due to the natural end of the 20-year electricity distribution concession in Uganda, which ended on March 31, 2025.
“As previously communicated at the Annual General Meeting held on 18th July 2025, the Company incurred a loss for the year ended 2024 and shall likely register a consecutive loss for the year ended 31st December 2025,” read part of the publication.
The company has since ceased generating operating revenue as a result, and the company’s board has indicated a pursuit of outstanding claims against the Government of Uganda through an ongoing dispute resolution process.
“The Company continues to actively pursue its outstanding claims against the Government of Uganda through the ongoing dispute resolution process as stipulated in the Privatization Agreements and as notified to the public previously. We will keep the shareholders and stakeholders informed of any material developments in this respect,” read part of the notice.
Umeme is currently in an international arbitration process in London with the Government of Uganda to settle a dispute over the final buyout amount for the company’s unrecovered investments.
The government is said to have paid an initial $118 million, but Umeme is seeking an additional $292 million through the process.
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Following the unresolved arbitration in London, trading in Umeme shares on the Nairobi Securities Exchange (NSE) and Uganda Securities Exchange (USE) was suspended as of March 31, 2025, and remains suspended pending the arbitration outcome and resolution of regulatory uncertainties.
The company is now focused on recovering value for its shareholders through the dispute-resolution process and on exploring other business opportunities.
Umeme’s 20-Year Deal
The 20-year concession granted to Umeme Limited in March 2005 was part of Uganda’s broader power sector privatization, which was intended to modernize the electricity grid, reduce losses, and improve customer service.
It naturally ended on March 31, 2025, and the government decided not to renew the contract.
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Umeme was given the mandate to manage and operate the assets of the state-owned Uganda Electricity Distribution Company Limited (UEDCL), and the World Bank supported this move to bring in private capital and efficiency to what was then a dysfunctional sector.
In the 20 years of operation, Umeme connected millions of new customers, significantly reducing energy losses from 33% in 2005 to 16% in 2024, and despite operational successes, the concession faced political scrutiny, with the government, including President Museveni, complaining about the high electricity tariffs for consumers and a 20% guaranteed return on investment for Umeme, which was considered as extremely expensive.
The Hand over
Upon expiry, the electricity distribution assets and operations were returned to the full control of the state, through UEDCL, which also absorbed over 2,200 former Umeme employees to ensure service continuity and smooth operations.
In a financial twist, a major point of contention arose over the compensation for Umeme’s unrecovered investments in the network.
The Ugandan Auditor General determined the government owed $118 million, which was paid, but Umeme claims it is owed an additional $292 million, for a total of over $400 million.
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