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FMO provides financing for renewable energy in Sri Lanka and Uganda

FMO has been invited to arrange up to USD 55mio debt for South Asia Energy Management Systems Inc. (SAEMS) for a portfolio of 12 small hydro power projects (SHP) in Sri Lanka and Uganda with a combined capacity of 58MW.

SAEMS was established in February 2006, to undertake the development, construction, acquisition, ownership and long term operation of hydro-electric and other renewable energy projects and cellulosic ethanol biofuels production facilities world-wide. The portfolio consists of eleven projects in Sri Lanka and one in Uganda.  Five SHP’s were acquired by SAEMS and are operational (18.5MW), four SHP’s are under construction (29.3MW) and three are under development (10.2MW). The total investment amounts to USD 83.5million, of which FMO itself will invest USD 31million, USD 20million by means of a senior loan and USD11million by means of a mezzanine loan.

Limited power supply in Sri Lanka and especially Uganda is a severe constraint for socio-economic development. In Sri Lanka, 54% of the population is connected to the grid. Uganda has one of the lowest rates of per capita energy consumption in the world with only about 5% of the population having access to electricity. Uganda is currently experiencing significant power shortages.

The SHP’s will support the increasing demand for power and by that the economic development. The cost of power generated by hydro plants is significantly less than that of thermal plants, which rely on imported oil. Small hydro projects are attractive because construction periods are relatively short and the investment required relatively small.

SHP’s make use of renewable energy to produce electricity. The substitution of diesel generators, often used as emergency power, will contribute to reducing Uganda’s and Sri Lanka’s carbon footprint and emission of other pollutants. All projects are run of the river schemes.

FMO is in a unique position to provide financing as well as support to SAEMS to improve their operations to IFC performance standard level. In order to meet these standards, Environmental & Social Action/Monitoring Plans (ESAP) for each project have been created. Satisfactory compliance to each ESAP are a condition to draw under the facility for a specific project. FMO will provide assistance to train E&S specialists at SAEMS.

The Netherlands Development Finance Company (FMO) is the international development bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries. FMO's investment portfolio is EUR 3.4 billion, FMO is one of the largest bilateral development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not - or not yet - prepared to take. FMO's mission: to create flourishing enterprises, which can serve as engines of sustainable growth in their countries.

For further information you can contact:

Nicoline van Slingelandt

Communications Officer (PR)

T: +31 70 314 9790  

M: +31 622 563 047

E: n.van.slingelandt@fmo.nl