AfDB approves regional hydropower PPP to increase electricity supply and integration in Burundi, DRC, Rwanda

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The African Development Bank Group approved, on Wednesday, December 16, USD 138 million[1] of loans and grants toward a project which will help develop the energy sector in Burundi, the Democratic Republic of the Congo and Rwanda through the construction of the Ruzizi III Hydropower Plant and associated transmission line. The project is expected to increase electricity trading between the Economic Community of the Great Lakes Countries (ECGLC) through the supply of reliable and sustainable clean energy.

A reliance on fossil fuels for electricity generation have led to serious electricity supply problems within the  ECGLC countries impeding economic activities already slowed due to decades of conflict. The USD 625 million Ruzizi III Hydropower Plant Project entails the construction of a run-of-river dam (on the Ruzizi River between DRC and Rwanda downstream of Lake Kivu and from the Ruzizi II hydropower dam), of a 147 MW power plant and an 8.3km 220kV transmission line to the Kamanyola power dispatch center.

Upon project completion, Burundi’s current total capacity is expected to double, while Rwanda’s is expected to increase by half. DRC’s share is further expected to raise supply in the Eastern region currently not connected to the national grid network. The project will displace significant amount of fossil based power in the ECGLC region and increase the percentage of green energy. Additional benefits of the project include the creation of permanent and temporary jobs and a reduction in greenhouse gas emissions.

Alex Rugamba, AfDB Energy, Environment and Climate Change Department Director stated, “Sustainable regional infrastructure is a necessity element for strong regional integration and key to successfully tackling today’s most challenging climate change-related problems. The Ruzizi III Hydropower Plant Project is central to AfDB’s strategic vision for the development of the African energy sector through the promotion of universal access to low-carbon and inclusive modern energy.”

This is the first regional project designed as a public-private partnership (PPP) aimed at optimizing the hydropower potential of the Ruzizi cascade while taking advantage of private sector management efficiencies. For its implementation, a private partner, acting in the capacity of investor/developer, will be recruited and awarded a concession. This partner will be required to develop the project, be a majority partner in the project company with the three countries concerned and secure the necessary commercial debt.

The Bank Group allocated USD 138 million to finance the Ruzizi III project. The financing comprises a USD 29.5 million grant  from the African Development Fund (ADF) to Burundi, a USD 63.5 million grant and USD 21 million loan  from the Transition Support Facility (formerly Fragile States Facility) that were granted to DRC and Rwanda will benefit from an ADF loan of USD 24 million. The project is also supported by the Agence française de développement (French development agency), European Investment Bank, World Bank, Kreditanstalt für Wiederaufbau (German development agency) and the European Union.

[1] At the Rate of UA 1 = USD 1.41

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