Nyamagasani 2: A 5 MW run-of-river hydropower plant to develop clean electricity in Uganda
Uganda
PROPARCO is supporting the construction of a second 5 MW run-of-river hydropower plant in Western Uganda, by providing a risk subparticipation to FMO, the main project funder.
Client presentation
In the context of already close cooperation, FMO and PROPARCO have set up a new type of guarantee to reduce the risk exposure of the lead institution: risk subparticipation. In this case, PROPARCO’s client is consequently FMO, our Dutch counterpart. The advantage for the final beneficiary (NYAMAGASANI 2 HPP) is that it has a single lender at the funding round. The project is majority owned by Frontier Energy II Alpha + Beta K/S (DK), a Danish Private Equity Fund which is developing a portfolio of renewable projects in Sub-Saharan Africa and in which PROPARCO is a shareholder.
Project description
In the context of the Nyamagasani 2 project, the construction and operation of a 5 MW hydropower plant in Western Uganda are the purpose of the financing.
100% of the electricity generated by this project will be purchased by UETCL, Uganda’s electricity generator and distributor, at a price of 8.5 USDc/kWh, under a 20-year power purchasing agreement.
This project has been structured in the context of the Ugandan GetFit program. The total project cost stands at USD 19.3m, with 25% financed by equity and 75% by debt (totally provided by FMO, with a PROPARCO risk subparticipation covering 40% of this debt).
Project impact
Nyamagasani 2 will raise the generation capacity of Uganda’s power system.
The power plant will generate an average of 28.2 GWh of low-carbon electricity a year throughout the project life cycle. As with Nyamagasani 1, the tariff of the electricity produced is more competitive than most of the other power generation projects in operation in the country. Nyamagasani 2 will theoretically provide access to electricity to some 310,000 people.
Furthermore, the power plant will create or maintain some 8,900 jobs in Uganda’s economy and will contribute EUR 25m to national GDP over the project life cycle.
The project will avoid the emission of 10,400 teq CO2 a year.
12/07/2017
Date of signature of the project
Uganda
Location
Financing tool
7 591 255
Euros
Amount of funding
Risk subparticipation of USD 6,449,664.48
NETHERLAND DEVELOPMENT FINANCE COMPANY
Head office country
PUG1037
CES
-
on the same region
-
on the same financial tool
