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.
Uganda’s power sector is suffering from a shortage of generating capacity due to years of underinvestment, which has resulted in power infrastructure falling into disrepair. The country has one of the lowest rates of per capita energy consumption in the world with only 10% of the population having access to electricity. It is ranked 118th out of 133 countries based on electricity supply.
Although economic growth in Uganda is expected to remain positive, the lack of reliable and affordable electricity is hindering a more sustainable economic growth. The development of Uganda’s energy infrastructure and supply will be key for Uganda to maintain its robust economic growth rates.
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.
South Asia Energy Management Systems, LLC is a US based renewable energy company with corporate offices in Plantation, Florida, engaged in the business of acquiring, developing, and operating run-of–the-river hydropower projects. SAEMS currently operates run-of–the-river projects located in Sri Lanka and Uganda.
Daryl S. Clark, Vice President and Chief Financial Officer
South Asia Energy Management Systems, LLC
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on four sectors that have high development impact: financial institutions, energy, housing, and agribusiness. With an investment portfolio of EUR 5 billion, FMO is one of the largest European bilateral private sector development banks. www.fmo.nl
Eveline Schijf, Communications Officer (PR)
T: +31 70 314 9924
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