Ugandan power station receives $29.3m through refinancing deal

The Bugoye hydro-electric power station in Uganda will be refinanced thanks to a $29.3m loan provided equally by Emerging Africa Infrastructure Fund (EAIF) and Dutch development bank FMO on a 12-year term. The 13MW Bugoye hydro-electric power plant in Western Uganda, which has 98% availability, has been producing electricity since 2008 and feeds power into Uganda’s national grid.

EAIF has supported eight, and FMO 10, Ugandan renewable energy projects in hydro and solar power over the past 10 years. Together these facilities will account for up to 39% of Uganda’s installed generating capacity. The refinancing will also facilitate building new generating capacity.

The proceeds from the refinancing will also be used to repay EAIF the balance of its original loan to the project, fund repair works and repay construction loans made by the project sponsor (and indirectly, the 100% shareholder in Bugoye), the Africa Renewable Energy Fund (AREF), managed by Berkeley Energy. AREF is to use the refinancing proceeds to invest in other greenfield hydro-electric plants in Uganda.

Details of the new project are expected to be announced later in 2017. EAIF and FMO each contributed 50% of the US$29.3 million loan facility.

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Nazmeera Moola, head of EAIF at IAM, said: “In refinancing Bugoye, EAIF and FMO are freeing up capital that AREF will use to develop greenfield renewable power stations. That will add to Uganda’s economic potential by increasing the country’s generation capacity and creating new jobs in construction and plant operation. We have been able to have added developmental impact because Bugoye is an established, efficient and viable business with a suitable risk profile.”

Wilfred van den Bos, Senior Investment Officer Energy FMO adds: “FMO is a proud supporter of this project. This refinancing will free up capital that the owner will invest in other greenfield renewable energy projects. This is fully in line with our aim to positively affect peoples’ lives by supporting development, creating jobs and providing clean and sustainable energy to Uganda.”