The board of the World Bank’s International Finance Corp. (IFC) has approved a US$4 million loan for Uganda’s 6.5-MW Ishasha River hydroelectric project and the leveraging of another US$4 million investment in the project.
The project includes a small reservoir and power plant in the Ishasha River just outside Uganda’s Bwindi Impenetrable Forest National Park. (HNN 7/18/07) The project features a 1,140-meter penstock, a powerhouse with a head of 90 meters, and a 10-kilometer transmission line to Uganda’s main transmission grid.
The IFC board voted to approve the project in late August. Final signing of project documents is pending.
The investment provides a ten-year US$4 million loan for the total US$12 million project. IFC also introduced project sponsor Eco Power Ltd. of Sri Lanka to another development financial institution that is to lend an equal amount on similar terms. IFC also is providing risk mitigation to Eco Power.
The run-of-river project is to be built in Kanungu District. It is expected to take 21 months to build. It is expected to produce power for 12 US cents per kWh, falling to 9 US cents/kWh after 2014. That compares to 20 US cents/kWh for thermal generation. It also is to avoid production of 22,100 tons of carbon dioxide per year.
Ishasha is being developed under Uganda’s Energy for Rural Transformation program. IFC expects it to demonstrate the viability and financeability of such projects to other potential developers and financiers. There currently are 10 small hydro projects totaling 80 MW being studied in Uganda, while 32 sites have been identified as viable.