DFIs refinance 250 MW hydropower project in Uganda

A consortium of development finance institutions and commercial lenders has completed the refinancing of more than US$400 million loans of Bujagali Energy Limited (BEL), owner of a 250 MW run-of-river hydropower project on the Victoria Nile in Uganda.

The financiers include IFC, a member of the World Bank Group, African Development Bank (Joint Mandated Lead Arrangers), Netherlands Development Finance Company (FMO), France’s Proparco, Germany’s DEG, United Kingdom’s CDC and two commercial banks: ABSA and Nedbank. The refinancing package will extend the tenor of the bulk of the senior and subordinated loans originally provided in 2007. 

This extension in tenor will reduce BEL’s annual debt servicing payments and make it possible for the company to reduce the cost of electricity produced by the hydropower plant over the next five years. This is one of the first such agreements to be implement in Sub-Saharan Africa.

Bujagali is one of the largest power generation plants in Uganda, contributing 45% of the country’s annual electricity generation. It provides clean, reliable base-load energy. Its commissioning in 2012 significantly reduced Uganda’s reliance on costlier thermal power generation.