Summary:

• The Permanent Secretary at the Ministry of Finance has requested amendments to power agreements, enabling the Ugandan government to make an advance payment for businessman Patrick Bitature’s Electromaxx, amid financial challenges and discussions about the potential government acquisition of the power plant.

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The Permanent Secretary and Secretary to the Treasury at the Ministry of Finance, Planning, and Economic Development, Ramathan Ggoobi, has formally urged the Ministry of Energy and Mineral Development to modify the power purchasing agreement and the implementation agreement between the government and Electromaxx. This amendment is necessary to facilitate the government’s advance payment for the acquisition of Electromaxx.

Electromaxx, owned by businessman Patrick Bitature, is the subject of this financial transaction.

In a letter dated December 14, 2023, Mr. Ggoobi communicated to the Permanent Secretary of the Ministry of Energy and Mineral Development. Following consultations regarding the “advance capacity payment to Electromaxx (U) Limited,” the Attorney General, in a letter dated December 6, 2023, advised that an Advance Payment could be made, contingent upon amendments to both the power purchasing agreement and the implementation agreement.

Mr. Ggoobi clarified, “The government of Uganda will execute the advance payment upon the submission of an unconditional and irrevocable corporate guarantee from Electromaxx (U) Ltd and a personal guarantee from two Directors of the company, Electromaxx (U) Ltd, totaling USD 7,000,000, valid as per the power purchase agreement until the power plant becomes operational.”

The letter’s purpose is to request the amendment of the power purchasing agreement between Uganda Electricity Transmission Company Ltd and Electromaxx (U) Ltd, as well as the implementation agreement with the Ministry of Energy and Mineral Development, enabling the government to advance capacity charges to Electromaxx (U) Ltd.

A few months ago, Mr. Bitature engaged in discussions with the Ugandan government to sell his thermal Electromax power plant in Tororo District, aiming to alleviate a $30-million debt owed to South African lender Vantage Capital.

Despite the unsuccessful bailout, during a meeting with President Yoweri Museveni, Bitature proposed the government’s acquisition of the power plant, owned by Simba Group and operated by independent power producer Electro-Maxx Limited. The 50-MW plant, established in 2012 under a build, own, and operate model, was directed at addressing low electricity generation and increasing demand in Uganda.

President Museveni instructed the ministries of energy and finance to continue negotiations with Bitature for further details. Notably, in June 2022, President Museveni directed the Auditor General to evaluate ELECTROMAXX Thermal Power Plant and the Modular Mini-Refinery Facility in Tororo owned by ELECTROMAXX and SIMBA OIL LIMITED for possible government acquisition.

Both companies are indigenous energy providers with innovative solutions for power, oil, and gas in Uganda, as confirmed by the Auditor General’s report commissioned by President Museveni.

Presently, the government maintains a power purchase agreement with Electromax, although the company has minimally contributed to the national grid due to surplus electricity from hydroelectric generation.

Bitature faces ongoing financial challenges, including a $10-million investment from Vantage Capital, which has tripled to approximately $30 million, leading to a legal dispute over ownership of his Kampala properties.