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Uganda pays $118 million to Umeme for investments not recovered

Ugandan private electricity utility Umeme Limited announced on Monday that it received $118,000,000 in compensation for unrecovered investment from the government, following the expiration its monopoly distribution rights in the country.

Umeme signed an agreement for a concession of 20 years in 2005. Umeme requested a renewal of the concession agreement in 2005, but the government refused.

According to the agreement with Umeme, the government must compensate the company for capital investments made in the network of power distribution that it has not recovered within the concession period.

Umeme stated in a press release that the payment made on Monday was what auditors from the government determined to be owed by Umeme.

Umeme claims that it has invested $234 million total in unrecovered investments.

It stated that its board was "optimistic" about the dispute being resolved in the 30-day period of good faith negotiations or, in any case, by an arbitral court in London.

Unable to reach a spokesperson from the Ugandan energy ministry for a comment,

The concession granted by Umeme ended on Monday. The state-owned Uganda Electricity Distribution Company Limited will be given the monopoly.

(source: Reuters)