KAMPALA – The Capital Markets Authority (CMA) of Uganda has moved to reassure the public and shareholders of UMEME Limited, following recent developments surrounding the conclusion of the concession agreement between UMEME and the Government of Uganda.
UMEME, the largest electricity distribution company in Uganda, has been operating under a 20-year concession agreement that was signed in 2004. The agreement, which was set to expire in 2025, granted UMEME the exclusive rights to distribute electricity in Uganda. However, in a recent development, the Government of Uganda announced that it would not be renewing the concession agreement.
The Government through Uganda Electricity Distribution Company Limited (UEDCL) has officially taken over National Power Distribution, Monday, April 1st, ushering in a new era of reliable electricity for all Ugandans.
According to the CMA, the decision not to renew the concession agreement has sparked discussions between UMEME and the Government of Uganda regarding the end-of-concession buy-out amount. The CMA has acknowledged the ongoing discussions and their implications for UMEME’s shareholders and the investing public.
“We wish to assure the public and shareholders of UMEME that there are robust mechanisms within the capital markets regulatory and supervisory framework designed to protect their interests and promote transparency,” said the CMA Management.
The CMA Management emphasized that the rights of all shareholders are safeguarded under the existing regulatory framework. “Any decisions impacting shareholders will require adherence to legal and regulatory standards that protect and prioritize their interests,” they added.
The authority also reassured the public that it remains committed to ensuring stability in the capital markets during this transition and beyond. “We will continue to monitor the situation and work collaboratively with all relevant parties to uphold market integrity and ensure compliance with regulatory obligations,” said the CMA Management.
The Uganda Securities Exchange, on which UMEME is listed, will continue to play a critical role in providing a transparent and efficient platform for trading in UMEME securities. The CMA urged the public to rely on advice from licensed investment advisors/stockbrokers and to avoid speculative information.
In conclusion, the CMA Management reiterated its commitment to protecting and promoting the interests of investors and fostering an efficient and transparent capital market in Uganda.
