FMO has arranged a US$ 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. a Ugandan entity. Lubilia is majority owned by Frontier Market Energy & Carbon Fund K/S, 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 US$ 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.
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.
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.