The Permanent Secretary and Secretary to the Treasury at the Ministry of Finance, Planning and Economic Development, Ramathan Ggoobi has requested the Ministry of Energy and Mineral Development to cause the amendment of the power purchasing agreement and the implementation agreement between the government and Electromaxx, to enable the former make an advance payment for the purchase of the latter.
Electromaxx is owned by businessman Patrick Bitature.
In a letter dated 14th December, 2023, Mr. Ggoobi informed the Permanent Secretary- Ministry of Energy and Mineral Development that upon consultation regarding the “advance capacity payment to Electromaxx (U) Limited”, the Attorney General video a letter dated 6th December, 2023 advised that an Advance Payment can be made provided it is through amending both the power purchasing agreement and the implementation agreement.
“The government of Uganda shall make the advance payment upon the presentation of unconditional and irrevocable corporate guarantee of the company, Electromaxx (U) Ltd and a personal guarantee of two Directors of the company, Electromaxx (U) Ltd in the sum of United States Dollars Seven Million only (USD 7,000,000) valid in accordance with the power purchase agreement until when the power plant is operational,” Mr. Ggoobi said.
“The purpose of this letter, therefore is to request you to cause an amendment in the power purchasing agreement between Uganda Electricity Transmission Company Ltd and Electromaxx (U) Ltd and the implementation agreement with your Ministry to enable government advance capacity charges to Electromaxx (U) Ltd.”
A few months ago, Mr. Bitature entered talks with the Ugandan government to sell his thermal Electromax power plant in Tororo District in a bid to bail himself out of a $30-million debt owed to South African lender, Vantage Capital.
Bitature, the group CEO of Simba Group— with interests in real estate, hotel and hospitality, telecom, oil and gas, and media, sought government assistance after being embroiled in a court battle with a South African lender over a loan repayment.
However, the bailout was a failure.
During a meeting with President Yoweri Museveni, Bitature floated the idea of the government acquiring the power plant, which is owned by Simba Group and operated by independent power producer Electro-Maxx Limited.
The 50-MW plant was built in 2012 under a build, own, and operate model to address low electricity generation and increasing demand in the country.
The president directed the ministries of energy and finance to continue discussions with Bitature to thrash out the finer details of the deal.
This website also understands that President Museveni in June 2022 directed the Auditor General to evaluate ELECTROMAXX Thermal Power Plant and the Modular Mini-Refinery Facility located in Tororo owned by ELECTROMAXX and SIMBA OIL LIMITED with a view of a possible acquisition of the infrastructure by the Government.
ELECTROMAXX and SIMBA OIL LIMITED are both indigenous energy companies with innovative approaches to providing power, oil, and gas solutions to Uganda.
The Auditor General in his report confirmed that the audit was sanctioned by President Museveni.
Presently, the government has a power purchase agreement with Electromax, although the latter has scarcely supplied electricity to the national grid due to surpluses from hydroelectric generation.
Bitature has recently been confronted with a number of financial issues.
According to a recent report, he is yet to repay a $10-million investment from Vantage Capital which has tripled in value to around $30 million, resulting in a legal battle over ownership of the Ugandan businessman’s Kampala properties.
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