US$ 1M development loan for Mpanda hydropower project in Burundi

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A US$ 1M development loan has been signed for the Mpanda hydropower project in Burundi. The loan is intended to fund the development activities of the said project ahead of its financial closing, which is expected in 2022.

The loan will be provided by Finergreen, a financial advisor based in Paris and dedicated to renewable energy development particularly solar, wind, hydro, and biomass as per an agreement signed with Mpanda Hydro Power, the developer of the Mpanda hydropower project.

To gather the necessary funds for the project, Mpanda Hydro Power is working closely with the UK government-funded Renewable Energy Performance Platform (REPP), managed by Camco Clean Energy.

The provisional budget for the Mpanda hydropower project is US$ 43.5M.

The development of the project

The Mpanda hydropower project began back in 2011 with the construction of a 35m high dam in Bubanza province, with a reservoir covering more than 100ha. However, the work stopped four years later in 2015 due to budgetary constraints, with an estimated 20% completion rate.

Fast forward to 2019, a Memorandum of Understanding (MoU) was signed between the Ministry in charge of Energy in the East African country and Hydroneo East Africa. This lead to the birth of the PPP Company Mpanda Hydro Power.

As per the MoU, Hydroneo would resize the project, mitigate its environmental impact, and resume the development and construction of the power plant. The company carried out studies to limit the environmental impact of the project, in particular on the adjacent protected Park of Kibira that is home to thousands of diverse species of fauna and flora. Following deeper analysis, the developer settled on a run-of-river plant that greatly reduces the flooded area to less than 5ha.

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The Public-Private Partnership (PPP) contract between the government of the East African country and Hydroneo, as well as a Power Purchase Agreement (PPA) between Mpanda Hydro Power and the Régie de production et distribution d’eau et d’électricité (Regideso), were finalized and executed in May this year.

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