Senior loan facility
People will benefit from the power generation
Uganda has one of the world’s lowest rates of electrification, with just 15% of the population having access to reliable energy. The Emerging Africa Infrastructure Fund (EAIF) has been at the centre of addressing Uganda’s need for power that will help the country’s economy grow and improve the living conditions for its people. EAIF has now supported 10 renewable energy projects in Uganda. To date, the Fund has invested US$126 million, bringing Uganda 138MW of green energy generated from solar and hydropower stations.
EAIF participated in the debt funding of the Lubilia Kawembe Hydropower station. Located in the Rwenzori Mountains in Western Uganda, the power station delivers 5.5MW of energy to Uganda’s national grid.
The power station was developed and owned by Lubilia Kawembe Hydro (LKH). LKH is a Ugandan entity majority owned by DI Frontier Market Energy & Carbon Fund, a Danish private equity fund that is developing a portfolio of renewable energy independent power producers in Eastern Africa.
FMO, the Dutch development bank, acted as Mandated Lead Arranger of the $10.2m senior loan facility, of which 50% was syndicated to the EAIF, a direct investment vehicle of the Private Infrastructure Development Group.
An important element of the project funding is the involvement of the 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). The project is funded by the European Union Infrastructure Trust Fund, and additionally supported by the Governments of the UK, Germany and Norway.
Lubilia Kawembe Hydro serves the equivalent of 256,000 people and is part of the new energy infrastructure stimulating economic and business development in Uganda. Delivering affordable and dependable power makes fragile economies more attractive local and foreign private sector investors. Power is also a vital component in widening access to mobile telephone and the benefits of the digital world to businesses, public services and individuals.
The new power station makes a positive contribution to the health of Uganda’s environment. Not only does it use endlessly recycled water to produce power, it also helps fight climate change by avoiding greenhouse gases production of at an annual avoided GHG rate of 11,000 tCO2eq.
Sustainable energy projects are now at the core of EAIF’s portfolio and we were delighted to work with FMO on the Lubilia Kawembe Hydro project. It is one of four hydro facilities we are helping to facilitate in Uganda and which are at different stages of development. We also have two solar farm projects in the country