Two clean energy projects backed by the Emerging Africa Infrastructure Fund (EAIF) took significant steps forward at the end of June. The 5.4MW Lubilia Kawembe Hydro (LKH) electricity generating station in Uganda was formally commissioned on 28 June, followed by a ground-breaking ceremony to mark the start of construction of the 40MW Central Solar de Mocuba (CESOM) project in Mozambique on 29 June.
Located in the foothills of the Rwenzori Mountains in Western Uganda, LKH is one of nine clean energy projects EAIF has helped finance in Uganda. The Dutch development bank FMO acted as the mandated lead arranger of the US$10.2M senior loan facility, of which 50% was syndicated to EAIF. The plant is expected to produce 20,200MWH per year in additional capacity.
LKH was developed under the GET FiT Programme supporting renewable energy projects in Uganda. GET FiT is managed by Germany’s KfW Development Bank in partnership with the Government of Uganda through the Electricity Regulatory Agency.
CESOM, now under construction in Mozambique, is expected to produce 80,000MWH per year, accounting for 4.8% of Mozambique’s current available electricity capacity and 40% of the capacity of its northern grid. The plant is an important part of the Mozambique government’s strategy of incentivising the creation of small- and medium-sized businesses in rural Mocuba.
The financing of the US$76M CESOM project was led by the International Finance Corporation (IFC). EAIF signed a Participation Agreement with the IFC to provide a US$16.9M B Loan, with a 16-year term and provided a US$7M Viability Gap Funding Grant for the project, raised from the Technical Assistance Facility of PIDG.