Today, FMO arranged a USD 10.2 million senior loan for the development and construction of a 5.4MW run-of-the-river hydropower project in Uganda. The project will be developed and owned by Lubilia Kawembe Hydro Ltd. (Lubilia), a Ugandan entity.
Lubilia is majority owned by 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 10.2 million facility, of which 50% was syndicated to the Emerging Africa Infrastructure Fund (EAIF). The run-of-the-river hydro will be located at the foot of the Rwenzori Mountains in Western Uganda. It will serve the equivalent of 256,000 people via generation and has an annual avoided GHG rate of 11,000 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 second project out of a larger mandate with Frontier to arrange ~USD 56 million financing for four small hydro’s in Uganda, totaling 31.9MW (~140GWh). The first project, Siti 1, achieved Financial Close on 28 October 2015. FMO financed this project together with EAIF. We are currently in due diligence phase for the Siti 2 (16MW) project.
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.
About FMO
FMO is the Dutch development bank. As a leading impact investor FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development, and has a 45-year proven track record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.2 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally. For more information please visit www.fmo.nl.
Press contact:
Paul Hartogsveld
Senior Communications Officer (PR) T: +31 70 314 9928 M: +31 6 11589127 E: p.hartogsveld@fmo.nl
