Two clean energy projects backed by the Emerging Africa Infrastructure Fund took significant steps forward in the last week of June.
The 5.4MW Lubilia Kawembe Hydro (LKH) electricity generating station in Uganda was formally commissioned on 28 June. A day later, on June 29, a ground-breaking ceremony saw work officially begin on the 40MW Central Solar de Mocuba (CESOM) project in Mozambique.
EAIF is member of the Private Infrastructure Development Group (PIDG). PIDG encourages and mobilises private investment in infrastructure in the frontier markets of sub-Saharan Africa, south and south-east Asia, to help promote economic development and combat poverty.
The financing of the $76 million CESCOM project was led by the International Finance Corporation (IFC). EAIF signed a participation agreement with the IFC to provide a $16.9 million B Loan, with a 16-year term.
In addition, EAIF directly provided a $7 million Viability Gap Funding Grant for the project, raised from the Technical Assistance Facility (TAF) of the PIDG.
CESCOM is being developed by the Oslo-based company, Scatec. Read more: Off-grid, captive power solutions sustain investment in Africa’s energy sector
Output from Mocuba is estimated to be 80,000MW hours per year and account for 4.8% of Mozambique’s currently available electricity capacity, but 40% of the capacity of its Northern grid.
The plant will be a core element in the Mozambique government’s strategy of incentivising the creation of small and medium-sized businesses in the mainly rural Mocuba area.
Lubilia Kawembe Hydro
Located in the Rwenzori Mountains in Western Uganda, Lubilia Kawembe Hydro is one of nine clean energy projects EAIF has helped finance in Uganda.
FMO, the Dutch development bank, has acted as mandated lead arranger of the $10.2 million senior loan facility, of which 50% was syndicated to EAIF. The project has been developed and will be owned and run by LKH.
A Ugandan entity, it is 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.
LKH was developed under 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 is also supported by the governments of Norway, Germany and the UK.