Washington, D.C., March 8, 2018—The
Board of Directors of IFC and MIGA have approved a plan to refinance more
than $400 million of loans to Bujagali Energy Limited and provide up to
$423 million in guarantees in support of the Bujagali hydropower project,
with the aim to help reduce electricity costs in Uganda, where only one
in five people have access to electricity.
Bujagali, a run-of-river hydropower project on the Victoria Nile, is one
of the largest power-generation plants in Uganda, contributing 45 percent
of the country’s annual electricity generation. It provides clean, reliable
base-load energy. Its commissioning in 2012 significantly reduced Uganda’s
reliance on costlier thermal power generation.
The refinancing package will extend the tenor of senior and subordinated
loans originally provided in 2007 by IFC, the African Development Bank
(AfDB), the European Investment Bank (EIB), the Netherlands Development
Finance Company (FMO), France’s Agence Francaise de Developpement (AFD)
and Proparco, Germany’s DEG and KfW, and four commercial banks (ABSA,
BNP Paribas, Nedbank and Standard Chartered Bank).
This extension in tenor will reduce Bujagali Energy Limited’s annual debt-servicing
payments and make it possible for the company to reduce the cost of electricity
produced by the hydropower plant over the next five years. The Government
of Uganda has committed to fully pass on these cost savings to consumers,
in support of their goals to spur economic growth and expand access to
In addition, MIGA will provide political risk guarantees of up 20 years
for equity investors in Bujagali Energy Limited, helping to shore up investor
support and long-term engagement with the project.
An existing partial risk guarantee from the International Development Association
(IDA) for two of the project’s commercial lenders remains in place.
The World Bank Group has been a long-term partner in the Ugandan power
sector. The World Bank, through IDA, continues to engage with the government
to support efforts to upgrade the country’s transmission and distribution
networks and expand on-grid and off-grid access to electricity, providing
connections for homes, schools, and health clinics. IFC is already an investor
in Umeme—Uganda’s main distribution company—both as lender and shareholder.
Bujagali’s commissioning in 2012 allowed the government to retire more
than 100 megawatts of diesel power plants and made it possible to nearly
eliminate government subsidies to the electricity sector. Since 2005, the
share of Uganda’s population with access to electricity has increased
from 9 percent to 22 percent, with the total number of customers having
grown from 292,000 to more than 1.1 million over the same period.
More than 90 percent of Uganda’s electricity is now generated from renewable
sources, making the Ugandan power grid one of the cleanest in the world.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
MIGA was created in 1988 as a member of the World Bank Group to promote
foreign direct investment in emerging economies by helping mitigate the
risks of restrictions on currency conversion and transfer, breach of contract
by governments, expropriation, and war & civil disturbance; and offering
credit enhancement to private investors and lenders. For more information,
World Bank Group support for the Bujagali Hydropower Plant
Power Plant Amended Indenmity Agreement