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EAIF-backed clean energy projects see power flow from hydro station in Uganda and work start on 40MW solar plant in Mozambique in same week

Two clean energy projects backed by the Emerging Africa Infrastructure Fund took significant steps forward in the last week of June. The 5.4 MW Lubilia Kawembe Hydro (LKH) electricity generating station in Uganda was formally commissioned on 28th June. A day later, on 29th June, 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.

Central Solar de Mocuba

The financing of the US$76 million CESCOM project was led by the International Finance Corporation (IFC). EAIF signed a Participation Agreement with the IFC to provide a US$16.9 million B Loan, with a 16-year term. In addition, EAIF directly provided a US$7m 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, which has over 1000MW of solar currently under construction around the world.

Output from Mocuba is estimated to be 80,000 megawatt 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.

Picture: Representatives of Mozambique’s national and local government join staff from CESCOM in placing the first PV panel.

Lubilia Kawembe Hydro

Located in the Rwenzori Mountains in Western Uganda, Lubilia Kawembe Hydro is one of 9 clean energy projects EAIF has helped finance in Uganda.

FMO, the Dutch development bank, has acted as mandated lead arranger of the US$10.2m 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 the UK, Germany and Norway.

Lubilia Kawembe Hydro

Picture: The power house and control room at Lubilia Kawembe Hydro

EAIF is managed by Investec Asset Management