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Projects

Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Bujagali Energy Ltd.
Project ID
6732
Fiscal year
2013
Status
Active
Guarantee holder
World Power Holdings Luxembourg S.à.r.l.
Investor country
Luxembourg
Host country
Uganda
Environmental category
A
Sector
Power
Date SPG disclosed
June 12, 2012
Project Board date
June 27, 2012
Gross exposure
 $5.3 million
Project type
Non-SIP
Strategic priority area
IDA
Complex Project

View Summary of Proposed Guarantee


On July 27, 2012, MIGA amended its guarantee to include an additional $5.3 million of coverage to World Power Holdings Luxembourg S.à.r.l. (WPH), an affiliate of Sithe Global (USA), insuring their additional equity investment in the Bujagali hydropower project. In 2007, MIGA issued a guarantee  of $115 million covering WPH’s initial investment in the project. The investor has increased its equity investment due to additional costs associated with the project. The coverage is for a period of up to 20 years against the risk of breach of contract. This additional coverage brings MIGA’s gross exposure under the project to $120.3 million.

The project consists of the construction and operation of a 250 megawatt, run-of-the-river hydropower plant on the Victoria Nile by Bujagali Energy Ltd. (BEL), of which WPH is a partner. The project was developed on a build-own-operate-transfer basis and reuses water flowing from two existing upstream facilities to generate electricity. The first generating unit was commissioned in February 2012 and the project reached full capacity in June 2012. The project also includes an associated Interconnection Project, which consists of a series of transmission lines to be owned and operated by the Uganda Electricity Transmission Company.

Reliable and accessible electricity is critical for Uganda’s social and economic development. Daily power shortages have stunted economic growth by an estimated one percent of the country’s gross domestic product. The Bujagali project has increased supply to the national power grid and reduced the need for more costly thermal power..

In addition to MIGA’s guarantee, the World Bank Group is supporting the project with $130 million in loans from the IFC and a partial risk guarantee of up to $115 million from the International Development Association. MIGA’s guarantee was essential to securing Sithe Global’s investment.

 

 
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