European lenders finalize US$95.6 million in funds to Uganda for 44.7-MW Muzizi hydropower facility

Uganda

Reports today out of Uganda indicate an updated funding agreement was signed Dec. 9, by Germany's KfW Development Bank and France's Agence Francaise de Developpement (AFD) and Uganda’s Ministry of Finance for KfW and AFD to provide US$95.6 million for the construction of the 44.7-MW Muzizi hydropower facility.   

The initial agreement to fund the project was signed last August for $95 million. According to a press release at that time, UEGCL contracted ILF Consulting Engineers, based in Austria, as implementation engineers to complete the technical design.

In the most recent agreement, KfW will provide a concessional loan of $42.6 million and a grant of $5.3 million, while funding from AFD is in the form of a $47.9 million concessional loan, according to the ministry.

Uganda said it will contribute $21.3 million in equity to finance the project that will be developed by Uganda Electricity Generation Company Ltd. (UEGCL).

"The money is now with the government," said KfW Director, Oliver Junger, who spoke from Kampala, the capital and largest city of Uganda.

The total project cost is estimated at about $117 million, and according to the government, Muzizi will increase the current power generation capacity in Uganda by about 5%, enough to supply energy for about one million people.

Construction is scheduled to begin in 2018 and be completed by 2021.

Muzizi hydropower facility will be built in western Uganda, located on the River Muzizi, upstream of Lake Albert in Kibaale district and will also cover the districts of Kyenjojo, Kabarole and Ntoroko, according to the ministry.

Uganda said the project will contribute to a sustainable growth pattern for the country and save about 123,000 metric tons of carbon emissions by replacing diesel-powered generation units.

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