Status: Approved investment
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The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

Nyamagasani 2 HPP Ltd is a special purpose vehicle incorporated in Uganda to develop, construct and operate a 6MW run-of-river hydro power plant. The project is developed in parallel to the adjacent upstream 15MW Nyamaghasani 1 project. Nyamagasani 2 HPP Ltd is in majority owned by a private equity fund managed by Frontier Investment Management Company from Denmark.

What is our funding objective?

The funding is targeted towards the development and construction of the 6MW Nyamagasani 2 run-of-the-river hydro plant. FMO is the lead arranger for the approximately USD 15.5 mln senior debt tranche. FMO intends to provide USD 10 mln itself, and catalyze USD 5.5 mln from another party.

Why do we fund this investment?

The transaction is expected to have a high development impact. It will support the economic development of Uganda and the region. The project is expected to generate 28 GWh clean energy per year, serving the equivalent of 71,165 people and has an annual avoided GHG rate of 14,784 tCO2eq. Uganda is a rapidly growing economy, but suffered from historic underinvestment in the power sector. In Uganda this is among others being addressed by the capacity addition targeted under the GET FiT program. FMO is additional in this transaction by providing debt with a 15y tenor, which is not available on the market in East Africa.

What is the Environmental and Social categorization rationale?

This transaction has been categorized as Category A, in line with FMO environmental and social risk categorization and mainly due to some resettlement. The main environmental and social risks surrounding the project are normal risks related to the construction activities and respective practices including spoil management, local recruitment of labor, biodiversity protection and resettlement. The major impacts are generated through the Construction Phase (24 months). For this, adequate mitigation plans have been developed. During the Operational Phase, impacts are negligible. FMO feels comfortable with the adequacy of the mitigation measures and the experience of the developer in their successful implementation. The following Performance Standards (“PS”) are triggered by the transaction: PS1: Assessment and Management of Environmental and Social Risks and Impacts PS2: Labor and Working Conditions PS3: Resource Efficiency and Pollution Prevention PS4: Community Health, Safety and Security PS5: Land Acquisition and Involuntary Resettlement PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources PS 8: Cultural Heritage PS 7 is not triggered because no impacts on local groups qualifying as Indigenous were identified.

Publication date
Effective date
Total FMO financing
USD 13.44 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)