The Emerging Africa Infrastructure Fund (EAIF), part of the Private Infrastructure Development Group, has signed a $27m loan agreement for the 16.5MW Kikagati run-of-river hydropower project. The plant, which is already under construction, is located on the Kagera River on the border between Uganda and Tanzania. The anticipated 113GWh/yr will be sold to the Uganda Electricity Transmission Company Ltd, which will sell half on to Tanzania.
The Netherlands’ FMO was lead arranger for the senior debt, signing its $27m portion in February. Loans from FMO and EAIF have 16-year tenors to help reduce the project’s cost. Kikagati will also receive $12.3m through a tariff top-up from the KfW-led Global Energy Transfer Feed-in Tariff programme. It is wholly owned by the Berkeley Energy-managed Africa Renewable Energy Fund (Aref) through the Kikagati Power Company Ltd.
The plant will consist of an 8.5-metre-high and 300-metre-long dam and three 5.5MW turbines.
The plant was held by China Shan Sheng Industry International Ltd until September 2009, when Norway’s Norfund and TrønderEnergi Group entered the project. A memorandum of understanding was signed in 2011 by the governments of Uganda and Tanzania and a joint technical committee established between the countries and the East African Community secretariat. Aref acquired TrønderEnergi's Ugandan assets in July 2015, including its 51% stake in Kikagati and part of Norfund's stake, with the latter retaining a 30% share in the project until July 2017 when it sold its remaining shares to Aref.
FMO and EAIF were advised by Royal Haskoning (technical and environmental and social), Clifford Chance (international counsel), Mukumbya Musoke Advocates (local counsel), Indecs (insurance), and BDO (model auditor).
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