This summary covers an additional $10 million equity investment by World Power Holdings Luxembourg S.à.r.l. in the construction of the Bujagali hydropower project.
On June 30, 2007, MIGA issued a guarantee totaling $115 million to World Power Holdings Luxembourg S.à.r.l. (WPH), an affiliate of Sithe Global (USA), to cover its investment in the Bujagali hydropower project. The coverage is for a period of up to 20 years against the risk of breach of contract. The investor is increasing its equity investment by up to $10 million due to additional costs associated with the project and has requested MIGA’s coverage. This additional coverage will bring MIGA’s total gross exposure under the project to $125 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 is expected to reach 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.
The project is a Category A under MIGA’s environmental review procedures. For information on the environmental impact of the Bujagali project, please click here.
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 is expected to increase supply to the national power grid at the lowest cost compared to other power generation expansion options under Uganda’s energy strategy, thereby reducing outages and costs.
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.