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Wednesday 3 May 2017 - FMO, Frontier Energy, and GET FiT celebrate the start of operations of the Siti 1 run-of-the river hydropower plant in Uganda together with the key stakeholders in the Ugandan power sector including ERA, UETCL, MEMD, REA and others. This new 5-megawatt hydropower plant is located in the Mount Elgon area in Eastern Uganda, and will generate clean, low-carbon, sustainable electricity to 60,000 homes, schools and businesses in the area. It has an annual avoided GHG rate of 12,144 tCO2eq. FMO arranged a USD 35 million senior loan for the financing of the 5MW Siti 1 and the 16.5MW Siti 2 run-of-the-river hydropower projects in Uganda. Both projects are developed and owned by Elgon Hydro Siti Limited (Elgon). Elgon is majority owned by DI Frontier Market Energy & Carbon Fund K/S (Frontier Energy), a Danish private equity fund managed by Frontier Investment Management that is developing and implementing a portfolio of renewable energy projects in Eastern Africa. This small run-of-the-river hydropower project is the first project out of a larger mandate with Frontier Energy to arrange USD 83 million financing for 5 small hydro’s in Uganda, totaling 47MW. FMO syndicated 50% of the Siti projects to the Emerging Africa Infrastructure Fund (EAIF).
The project is developed under the Global Energy Transfer Feed in Tariff (“GET FiT”), a dedicated support scheme for renewable energy projects managed by Germany’s KfW Development Bank in partnership with Uganda’s Electricity Regulatory Agency (ERA) and funded by the governments of Norway, Germany, the United Kingdom and the European Union. The GET FiT programme helps renewable energy sources become more affordable and therefore more accessible in Eastern Africa. GET FiT is providing a subsidy of EUR 2.9 million in the form of result based premium payments per kWh of delivered electricity.
Uganda has one of the lowest electricity consumption per capita in the world, with an average electrification rate of 15%. The country’s power sector suffered from a shortage of generating capacity and a lack of reliable and affordable electricity is hindering a more sustainable economic growth.
FMO is the Dutch development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development, and has a 45-year proven track record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 9.8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally.