Pan-African insurer underwrites $7.7m Burundi power project
Wednesday March 27 2024
A Virunga hydro-electric power project. Burundi’s power sector remains largely underexploited with less than 15 percent of the population having access to electricity. PHOTO | COURTESY
African Trade and Investment Development Insurance (Atidi) has provided a political risk insurance cover for the Songa Energy $7.7 million Ruvyironza hydropower project in Burundi.
The 1.65 megawatts (MW) run-of-the-river Upper Ruvyironza Project is the first hydro Independent Power Producer (IPP) and will be the second to be connected to the national grid after the 7.5 MW Upper Mulembwe solar project also insured by Atidi.
Construction began in May 2023 and the project is forecast to begin commercial operations by the end of this year.
The project is financed by Virunga Power, which also operates renewable power projects and rural distribution grids.
Songa Energy and Virunga Power are jointly developing two hydropower plants, including the Upper Ruvyironza project, to output a total of 10.65 MW.
“We are excited by the partnership with Atidi and see significant value in their support for our Songa Energy investment in Burundi. By bringing local knowledge and developing products that fit the needs of the country, Atidi is unlocking capital in unique ways. We look forward to a long-term “win-win” partnership with the government of Burundi to ensure reliable, clean energy is available for the population,” Virunga Power founder and CEO Brian Kelly said.
Atidi Underwriter and acting Regional Liquidity Support Facility (RLSF) Coordinator Obbie Banda said the company had been in close contact with Virunga Power over the last few years as they advanced their portfolio projects.
“We look forward to working with Burundi’s government and partners, Songa Energy and Virunga Power, in supporting similar efforts as we all make our collective efforts towards the attainment of Sustainable Development Goal (SDG) 7 – access to energy for all,” Mr Banda said.
Established by Common Market for Eastern and Southern Africa (Comesa) in 2000, Atidi was created as an insurer of investment risk and political risk for investors engaging in business across Africa.
Originally known as the African Trade Insurance Agency (ATI), this initiative emerged due to concerns among African leaders regarding low levels of foreign direct investment on the continent.
Read: Pan-African insurer in renewed push for continental investment
Burundi’s power sector remains largely underexploited with less than 15 percent of the population having access to electricity.
The electricity generated from the project will be sold to the national power and water utility la Régie de Production et de Distribution de l'Eau et de l'Electricité (Regideso) under a 25-year Power Purchase Agreement (PPA).
The power will be delivered to the national grid via a new 2.4km transmission line that will be constructed as part of the project.