Following the facility agreement signed in September with Dutch development bank FMO; Building Energy, a multinational company operating as a global integrated IPP in the Renewable Energy Sector with experience in developing more than 2000MW of renewable energy projects in Africa, announced the achievement of the financial close for the construction of the 10 MW (14GWh/y) Tororo solar PV project in Uganda. Construction works started on 14th December 2016 and will last for about 7 months.
The total amount of the financial transaction is USD 19.6 million: FMO acted as Mandated Lead Arranger of the USD 14.7 million facility, 50% of which was syndicated to the Emerging Africa Infrastructure Fund, while USD 4.9 million is the equity from the project’s shareholders. The plant is majority owned by Building Energy, which will be responsible for its construction and operation and is also EPC Contractor and O&M Contractor for this project. “Renewable energy projects, particularly solar, have the ability to be financed and built and be producing power quickly and have an economic impact quickly. I look forward to the Tororo Solar project stimulating the area’s economy and competitiveness and improving the quality of life for many. Renewable energy is high on EAIF’s priorities, as it is with our sister companies in the Private Infrastructure Development Group,” said EAIF Chairman, David White.
Uganda has one of the lowest electricity consumption per capita in the world, with an average electrification rate of 18.2%. The country’s power sector suffered from a shortage of generating capacity and a lack of reliable and affordable electricity is hindering more sustainable economic growth. In this scenario, the project will also contribute to the socio-economic development of the Tororo area in Eastern Uganda, where it is located. Additionally, it will play a role in terms of employment, thanks to the creation of 250 jobs during the construction phase, and 8 local jobs during the operational one. The solar plant will serve the equivalent of 36,200 people via generation and has an annual avoided GHG rate of 7,400 tCO2eq.
It is the first Uganda’s project promoted by the Government in the renewable energy sector, developed under the KfW led GET FiT facility, which is a dedicated support scheme for renewable energy projects managed by Germany’s KfW Bankengruppe 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.
Matteo Brambilla, Building Energy Managing Director Africa, said: “We are pleased with the financial closing of the Tororo project, which will be a strategic step to further consolidate our presence in East Africa, and at the same time, it will also contribute to the socio-economic development of Tororo region”.
Linda Broekhuizen, Chief Investment Officer of FMO, said: “FMO is glad to see the financial close of this project, which will be followed by increased renewable energy production to strengthen Uganda’s grid in the Eastern part of the country. This project truly serves as an example of how FMO contributes to clean energy initiatives in developing and emerging markets.” Chadbourne and Parke LLP and Eaglestone are respectively the legal and financial advisors appointed for the project by Building Energy, while the local legal counsel was Sebalu & Lule Advocates. The insurance advisor is Alesco.
FMO is the Dutch development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. The company believes that a strong private sector leads to economic and social development, and has a 45-year proven track record of empowering people to employ their skills and improve their quality of life. It focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.2 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally.
Building Energy is a multinational company operating as Global Integrated IPP in the Renewable Energy Industry on four continents. The company is vertically integrated on the value chain, from the development of projects to the sale of energy. With a pipeline in 24 countries with over 2,500 MW and generative assets being built over the next two years for more than 800MW (the Near Notice to Proceed and Backlog projects), the company is positioned to be one of the major players on the international scene in the renewable energy field.
