Uganda’s power producer Bujagali Energy Limited, in which Jubilee Holdings #ticker:JUB has a 25 percent stake, last year took new loans worth Sh51.5 billion to extend the maturity of debt and lower its finance costs.
The debt refinancing was disclosed by the International Finance Corporation (IFC), which provided $100 million (Sh10.3 billion) as its share of the new debt pool.
The IFC says it contributed the sum to the refinancing for its own account, out of an about $500 million (Sh51.5 billion) total package.
“The purpose of the refinancing (was) to lengthen the tenor of the loans thereby reducing the amount of the loans’ annual debt service and, in turn, lowering the project’s tariff, and making electricity in Uganda more affordable,” IFC said in its investment disclosures.
Jubilee chairman Nizar Juma told the Business Daily that the debt refinancing was completed last year and the goal was to lower the finance costs.
“The government of Uganda requested the refinancing to lower the rates. This was completed with the participation of all the lenders and the project is now running smoothly,” he said.
The new debt investment is not expected to result in any change to the physical or operational footprint of the hydropower plant or its electricity transmission arrangements, IFC said.
Bujagali has an installed capacity of 250 megawatts and supplies nearly half of Uganda’s effective energy capacity.
It is one of Africa’s largest privately financed hydropower project and currently the largest clean energy venture among least developed countries, according to the Nairobi Securities Exchange-listed Jubilee Holdings.
Bujagali is an independent power producer, which sells electricity to Uganda Electricity Transmission Company Ltd under a 30-year power purchase agreement signed on December 6, 2007.
Headquartered in Jinja, Bujagali is owned by a group of institutional investors including UK sovereign wealth fund CDC, Sithe Global Power LLC and a consortium of companies housed under the Aga Khan Fund for Economic Development (Industrial Promotion Services (Kenya) Ltd and Jubilee Holdings).
Jubilee Holdings invested in the power plant as part of its strategy of diversifying its investments into long-term ventures with reliable, high returns.