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FMO invests in renewable energy in Uganda

FMO arranged a USD 24 million senior loan for the financing of a 14MW run-of-the-river hydropower project in Uganda.
The project is being developed by South Asia Energy Management Systems LLC (“SAEMS”), a renewable energy company engaged in the business of acquiring, developing and operating run-of-the-river hydropower projects in emerging markets. This financing follows on from an earlier financing in 2009, when FMO arranged a USD 55 million debt package for the development of 12 run-of-the-river hydropower projects totaling 58MW located in Uganda and Sri Lanka.

The project, located in the village of Kilembe, in the Kasese district in Western Uganda, will provide reliable, clean and relative low cost power to the country. The cost of power generated by hydro plants are significantly less than that of thermal plants, which rely on oil. This renewable project will also facilitate the substitution of diesel generators, which are used as emergency power, and will contribute to reducing Uganda’s carbon footprint and emission of other pollutants.

Of the USD 24 million loan FMO will provide USD 12 million, the Emerging Africa Infrastructure Fund will provide USD 6 million, DEG USD 4 million and Finnfund USD 2 million.

Jody Lenihan, CEO of SAEMS: ”As one of the first pioneers of renewable energy development in Uganda, we are pleased to further our partnership with FMO on a new run of river hydropower project in Uganda, following the successes of 18MW Mpanga. We are grateful to have a financing partner who shares our mandate of “Sustainable Profit” which maximizes the concurrent benefits to our shareholders, the local community of a developing nation in need of infrastructure improvement, and the environment.

We are very pleased to support SAEMS and Uganda in the development of this run-of-the-river hydropower project that will provide urgently needed power to Uganda. The unique portfolio approach of SAEMS –developing 13 projects in one entity– enabled us to provide financing to relatively small hydro projects, which are normally difficult to finance on a standalone basis,” said Huub Cornelissen, director Energy & Housing of FMO.

Additional information:
News date: 23/01/2012

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