AfDB approves Ruzizi III hydropower plant project, bringing green energy to Burundi, DRC and Rwanda

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The African Development Bank (AfDB) Group, on December 16, 2015 in Abidjan, formally approved US$ 138 million of loans and grants to finance the Ruzizi III Hydropower Plant Project. Implementation of the project will be carried out at a total cost of US$ 625.19 million (of which the US$ 138.88 million will be borne by the AfDB’s public sector window and US$ 50.22 million by the private sector window).

Ruzizi III hydropower plant is part of the Programme for Infrastructure Development i­­n Africa (PIDA) and involves Burundi, the Democratic Republic of Congo (DRC) and Rwanda.

The financing will enable the construction of a run-of-river dam straddling the Ruzizi River between the DRC and Rwanda, as well as a 147 MW power plant and distribution station. These new facilities will provide an independent source of green energy, helping the DRC, Rwanda and Burundi to meet their growing energy needs. All three countries have been experiencing difficulties in meeting the demand for electricity, due to over a decade without major energy infrastructure investments while their populations and economic activity have continued to grow.

By ensuring reliable and affordable electric power, the Ruzizi III Hydropower Plant Project will increase the region’s access to electricity by 300% thereby contributing to the sustainable socio-economic transformation of the region. As a regional project, the electricity generated will also feed into the East African Power Pool (EAPP).

Ruzizi III Hydropower Plant Project is the first regional power project in East Africa to be established as a public-private partnership (PPP). In this framework, the project’s implementation has been entrusted to the Great Lakes Energy Organization (EGL), a sub-regional body which coordinates energy development in East Africa. Its implementation has been possible following a grant awarded to EGL in 2011 by NEPAD Infrastructure Project Preparation Facility (NEPAD-IPPF) to finance transaction advisory services for the Ruzizi III Hydropower Plant Project. This US$ 1.4 million NEPAD-IPPF grant helped provide key expertise for the project’s development, as well as sound knowledge of the context and actors of the region that led to the project’s eventual financial close.

NEPAD-IPPF is a multi-donor Special Fund hosted by the AfDB which provides grants to African countries through Regional Economic Communities (RECs), Power Pools (PPs) and other specialized regional institutions to facilitate the preparation of regional or cross-border infrastructure projects in energy, trans-boundary water, transport and ICT to make them bankable and, therefore, investment-ready. The grants are used to carry out pre-feasibility, feasibility, technical and engineering designs as well as transaction advisory services. NEPAD-IPPF is supported by Canada, Germany, UK, Spain Denmark and Norway.