Lenders offer sh90b for energy

Wednesday, Nov 12, 2008

TWO small and mini-hydropower projects have received funding worth $49m (sh90b) for their development, boosting lenders and financiers confidence in the energy sector.

The funds will finance 18MW Mpanga and 13MW hydropower projects in the south-western region.

The US-based renewable firm, South Asia Energy Management Systems (SAEMS), will develop Mpanga, while Norwegian Tronder Power Ltd, will implement the Bugoye power project.

Emerging Africa Infrastructure Fund (EAIF) has agreed to provide $14m of debt to SAEMS to develop the Mpanga project.

The Mpanga hydro power project is a run-of-the river hydro project that will generate 18MW.

The power will be sold to the national grid under a long-term Power Purchase Agreement.

Similarly, EAIF will provide $35m to fund the Bugoye power project being developed by Tronder Power.

The project is a run-of-the river hydro electric installation.

It will have an installed capacity of 13MW.

Bugoye is located at the foot of the Rwenzori Mountains in Kasese district at the border with DR Congo.

The project will feed its energy into the main grid at the Nkenda sub-station via a 6km long 33kV transmission line.

This transmission line will be financed by a grant from the Norwegian government.

The project company will develop, construct and operate the line.

The limited power supply in Uganda is a severe constraint to development.

The cost of hydro power is significantly less than that of thermal plants that rely on imported oil.

Increased carbon emissions are also avoided.

Small hydro-projects such as Bugoye and Mpanga are attractive because construction periods are relatively short, energy experts argued.

Source: New Vision