Govt defends Bitature multibillion power deal

The State Minister for Privatization and Investments, Ms Evelyn Anite, has defended the recently sealed multibillion power deal between the government and city businessman Patrick Bitature.

Ms Anite who reportedly brokered the deal which will see government acquire Mr Bitature’s Tororo-based 50 megawatt Electromax diesel power plant, told journalists at her office on Wednesday that there is need for preparation for any future blackout and thus the relevancy of the deal.

Government through the Ministry of Energy and Mineral Development earlier this month signed a five-year power purchase agreement with Bitature, and that the Memorandum of Understanding (MoU) would be executed between the Uganda Electricity Transmission Company Ltd and Electro-Maxx.  

“First of all I want to tell the country that there was nothing like a bailout as I saw the media reporting it. As government, 60 percent of our budget is invested in doing business with the private sector and this is one of them,” she said.

“This is not the first private power plant the government is buying, we first bought the Jacobsen Elektro from Germans and this time again when the private investor [Bitature] approached us, we agreed and decided to buy it but since we don’t have money, we agreed to take it over gradually,” she further explained.

Under this arrangement whose monetary value has remained a secret, Mr Bitature will operate the venture for five years and then transfer it to the government to act as a standby generator.

Ms Irene Batebe, the Permanent Secretary at the energy ministry, reaffirmed that the deal is aimed at preparing the country for any future unexpected blackouts.

“These thermal power plants have a running power purchase agreement, it has existed for years this is not a new power plant. We have renewed the power purchase agreement for the next five years. After the five years, we shall sit and evaluate at that time whether we still need the plants because you assess within that period what your demand is and how the sector is progressing,” she said.

Ms Anite said the government will go on with this arrangement, “because it is aimed at supporting a local [Ugandan] entrepreneur.”

“If the issue is about creating employment and adding value to Ugandans, I, Anite will definitely support that but as I said I don’t broker bailouts but I can only broker incentives,” she stated.

Bitature woes

In July this year, the International Chamber of Commerce Court of Arbitration in London by a sole arbitrator, Prof Fidfelis Oditah KC, SAN ordered Mr Bitature to pay back over $65.7m (about Shs244.8b) to Vantage Mezzanine Fund II Partnership, a South African investment Fund and risks losing part of his businesses should he default.

This protracted legal matter ended up before the London Court of Arbitration after efforts by Vantage to auction were frustrated by Ugandan courts.

“I don’t support any business collapsing and that is why as the Minister in that docket, I will do whatever I can to help the investors get incentives but not bailouts,” Ms Anite said.