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Add to Preferred SourcesA consortium of development finance institutions and commercial lenders announced the completion of the refinancing of more than $400 million loans of Bujagali Energy Limited (BEL), aiming to help reduce electricity costs in Uganda.
The financiers include IFC, a member of the World Bank Group, African Development Bank, Netherlands Development Finance Company (FMO), France’s Proparco, Germany’s DEG, United Kingdom’s CDC and two commercial banks: ABSA and Nedbank.
Bujagali, a run-of-river hydropower project on the Victoria Nile, is one of the largest power generation plants in Uganda, contributing 45 percent of the country’s annual electricity generation. It provides clean, reliable base-load energy. It’s commissioning in 2012 significantly reduced Uganda’s reliance on costlier thermal power generation.
This extension in tenor will reduce BEL’s annual debt servicing payments and make it possible for the company to reduce the cost of electricity produced by the hydropower plant over the next five years. This was an innovative approach and one of the first to be implemented in Sub Saharan Africa in which the Ugandan government has committed to fully pass on these cost savings to consumers, in support of its goals to spur economic growth in the country.
The project has support from across the World Bank Group and the African Development Bank.
The World Bank Group has been a long-term partner in the Ugandan power sector. The World Bank, through IDA, continues to engage with the government in support of efforts to upgrade the country’s transmission and distribution networks and expand on-grid and off-grid access to electricity, providing connections for homes, schools, and health clinics. IFC is already an investor in Umeme—Uganda’s main distribution company—both as lender and shareholder.
More than 90 percent of Uganda’s electricity is now generated from renewable sources, making the Ugandan power grid one of the cleanest in the world.
Original source: IFC
Published on 23 July 2018