Agile financing is the key to unlocking hydro in Sierra Leone
20th Jul 2020
Freetown, Sierra Leone: InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), has signed an agreement with lead developer Joule Africa to provide US$6 million of funding to the 143MW Bumbuna Hydro II initiative in Sierra Leone. The funding forms part of a package involving the private sector and development finance institutions designed to ensure that Bumbuna Hydro II can go the “last mile,” reaching construction and operations to deliver year-round, renewable baseload power in Sierra Leone.
InfraCo Africa’s CEO, Gilles Vaes said, “As part of the PIDG, InfraCo Africa is uniquely positioned to be nimble and flexible, providing timely development capital and expertise at any point in the lifecycle of a project. Often we are needed in the early stages to develop a concept or prove a pioneering model but, as in the case of Bumbuna Hydro II, we can also come in at a later stage to help with the critical and final push across the finishing line participating in the project’s steering committee, particularly in these challenging times. Bumbuna Hydro II is expected to have a tremendously positive impact powering sustainable economic development in Sierra Leone.”
The ambitious project is being delivered by experienced renewables developer, Joule Africa, through local project company, Seli Hydropower. Located on the Upper Seli River, 230km north east of Sierra Leone’s capital, Freetown, the Bumbuna Hydro II project will enable distribution of significant additional power to the national grid. Consumers will benefit from increased reliability of power and will also see cost savings via affordable tariffs and reduced reliance on expensive, polluting diesel back-up generation.
Paul Kunert, CEO of Joule Africa, added, “InfraCo Africa’s commitment to Bumbuna Hydro II and Joule Africa comes at a crucial stage for us as we enter the last lap in the development of the Project. With InfraCo Africa’s commitment and a respected equity partner shortly to come in, we now have the funding in place to reach financial close next year. We’ve been working with PIDG over a number of years and we’re delighted to be able to expand that relationship with InfraCo Africa today.”
InfraCo Africa is committed to supporting the Government of Sierra Leone’s National Renewable Energy Action Plan.[i] This new investment into the country’s renewable energy sector complements InfraCo Africa’s work elsewhere in the country to develop the pioneering Sierra Leone Mini-grid project. Delivered across 41 sites, Sierra Leone Mini-grid will roll out off-grid solar technology at scale, delivering clean, first time power for remote homes and businesses.
Bumbuna Hydro II also exemplifies the capacity of the wider PIDG to engage with and support projects from concept to commercial reality. PIDG’s Technical Assistance (PIDG TA) supported the project’s early development via returnable and technical assistance grants to fund an embedded advisor to the GoSL. The involvement of PIDG company, the Emerging Africa Infrastructure Fund (EAIF), has also been central to enabling the project to progress to this stage.
Roland Janssens a Director at EAIF’s manager, Ninety One, says; “We have been following Bumbuna Hydro II closely and look forward to seeing the project reaching the stage where we are able to offer long term debt finance.”
Bumbuna Hydro II is expected to begin construction in 2021.