Today, FMO arranged a USD 24 million senior loan for the financing of the 16.5MW Siti 2 run-of-the-river hydropower project in Uganda. The project will be developed and owned by Elgon Hydro Siti Limited (Elgon), a Ugandan entity that is also constructing the Siti 1 run of river hydro (financed by FMO on the debt side). Elgon is majority owned by DI Frontier Market Energy & Carbon Fund K/S Fund, a Danish private equity fund that is developing a portfolio of renewable energy independent power producers in Eastern Africa. FMO acted as Mandated Lead Arranger of the USD 24 million facility, of which 50% was syndicated to the Emerging Africa Infrastructure Fund (EAIF).
The run-of-the-river hydro will be located in the Mount Elgon area in Eastern Uganda. It will serve the equivalent of 706,000 people via generation and has an annual avoided GHG rate of 30,624 tCO2eq. Uganda has one of the lowest electricity consumption per capita in the world, with an average electrification rate of 15%. The country’s power sector suffered from a shortage of generating capacity and a lack of reliable and affordable electricity is hindering a more sustainable economic growth.
This small run-of-the-river hydro power project is the third project out of a larger mandate with DI Frontier to arrange ~USD 56 million financing for four small hydro’s in Uganda, totaling 31.9MW (~140GWh). Siti 1 achieved Financial Close in October 2015 and Lubilia in June 2016. FMO financed these projects together with EAIF.
The project is developed under the KfW led GET FiT facility, which is a dedicated support scheme for renewable energy projects managed by Germany’s KfW Development Bank in partnership with the Government of Uganda through the Electricity Regulatory Agency (ERA). It is funded by the European Union Infrastructure Trust Fund, and is also supported by the Governments of Norway, Germany and the United Kingdom.
