Published on 04/01/2024
The Ugandan government is currently in the process of making an upfront payment of $7 million (equivalent to Shs 26 billion) to entrepreneur Patrick Bitature for the acquisition of his ElectronMaxx thermal power plant located in Tororo District, eastern Uganda.
Last year, President Museveni directed the Ministries of Finance and Energy to assess the feasibility of acquiring the 50-megawatt plant, constructed in 2012 to address the country’s insufficient power generation.
This acquisition is anticipated to assist Bitature in initiating the repayment of his corporate debts, which are estimated to exceed $30 million.
In a communication dated December 14, Treasury Secretary Ramathan Ggoobi informed the Energy Ministry that, following consultations with Attorney General Kiryowa Kiwanuka, the purchase was endorsed, contingent on amendments to both the power purchasing agreement and the implementation agreement.
Ggoobi specified, “The Government of Uganda will proceed with the advance payment upon receipt of an unconditional and irrevocable Corporate Guarantee from ElectroMaxx (U) Ltd and a personal Guarantee from two Directors of the Company, valid until the Power Plant is Operational.”
Despite a renewed five-year power purchase agreement with Electromaxx in 2022, the company has contributed minimally to the national grid due to hydroelectric surpluses.
In a recent report to the Minister of Energy, Auditor General John Muwanga highlighted Electromaxx’s substantial debts, including $13,978,900 and Shs138,537,919 in ascertained debts related to litigation costs, as well as unascertained debts of $1,412,477.76 linked to pending or threatened litigations. Muwanga cautioned that these debts might impede Electromaxx’s ability to transfer facility assets to the government.
However, Privatisation Minister Evelyne Anite defended the transaction, emphasizing the necessity of preparation for potential blackouts. Anite explained that this acquisition was not unprecedented, citing a previous purchase of Jacobsen Elektro from Germans. She clarified that the government, lacking immediate funds, agreed to gradually assume control of the plant.
Under the agreement, Bitature will operate the venture for five years before transferring it to the government to serve as a standby generator.
