NAIROBI, 29 January, 2020 – The African Trade Insurance Agency (ATI), in partnership with Gigawatt Global, announced the launch of the first energy project under its Regional Liquidity Support Facility (RLSF). The project is the first private grid-connected solar field in Burundi and the country’s first permanent power station in three decades.
ATI provided an innovative solution to cover the project’s payment risk in support of partners that included the UK government-funded Renewable Energy Performance Platform (REPP), the United States International Development Finance Corporation (DFC) (formerly the Overseas Private Investment Corporation – OPIC) and the Inspired Evolution II Fund.
The 7.5MW solar project will add nearly 15% to Burundi’s total energy-generation capacity and it will provide electricity to 87,000 people and businesses placing a significant dent in the country’s energy deficit, where less than 5% of the population has access to power.
In addition to the positive impact on the climate, this project will also demonstrate that green energy can provide economic benefits as it is expected to create 300 temporary jobs during the solar-field construction phase and up to 50 permanent jobs during the facility’s 25-year operational phase.
In 2017, ATI, the German development bank, KfW, with financing from the German Federal Ministry for Economic Cooperation and Development (BMZ), launched the RLSF. The Facility was created to help tackle climate change by supporting renewable energy projects in ATI’s member countries. The RLSF has an initial capacity of EUR 63.2 million and it supports small and mid-scale renewable energy projects with an installed capacity of up to 50 MW (and in exceptional cases up to 100 MW) by protecting the developers against the risk of delayed payments by public off-takers to ensure more projects reach financial close.
The Facility can be accessed by independent power producers (IPPs) located in countries that sign onto the RLSF Memorandum of Understanding (MoU). To date, seven countries have signed on – Benin, Burundi, Côte d’Ivoire, Madagascar, Malawi, Uganda and Zambia, with several others in the pipeline including Ethiopia and Ghana. ATI is actively encouraging other countries to sign on as a way of providing more cost-effective and clean energy solutions.
QUOTE from Michael Fichtenberg, Managing Director, Gigawatt Global Burundi SA and Vice President of Finance and Business Development of Gigawatt Global Cooperation
“We accomplished this pioneering project together with supporters from across the entire development spectrum, including innovative financial products being deployed for the first time with this project,” he said, citing the support of the ATI’s innovative RLSF. “We believe this demonstrates how solar power can be implemented in other developing markets, while decreasing dependency on costly and polluting diesel generators.”
QUOTE from Geoff Sinclair, Managing Director of Camco Clean Energy, REPP’s Investment Manager
“The announcement that the Mubuga project has moved to full construction is a landmark moment for Burundi’s energy sector and for the people of Burundi. REPP is very glad to have supported the project and its sponsors, Gigawatt Global and Evolution II Fund. We are especially pleased to be partnering with the ATI to deliver an innovative risk mitigation solution for IPPs in the region. We congratulate ATI on the first application of the RLSF product and look forward to working together with them again in future.”
QUOTE from John Lentaigne, Ag CEO, ATI
“ATI has a strong institutional focus on supporting our member countries’ transition to the green economy. Thanks to the support of the German government and KfW, the RLSF is one of a number of insurance solutions that we are using to help address climate change in Africa. The RLSF enables countries that have signed onto it to attract quality IPPs, who are in turn able to efficiently implement renewable energy projects in their countries. This solar-project in Burundi is the first of what we expect to be many more green projects in our countries that will benefit from ATI’s de-risking solutions.”