- Savannah Energy is buying Norfund’s interests in three major African hydroelectric power projects.
“We are delighted to be announcing our planned entry into the Bujagali, Mpatamanga and Ruzizi III hydropower projects through the acquisition of 50.1% of Norfund’s interest in Klinchenberg. Bujagali is a flagship East African power sector asset with an excellent 13-year operating and payment track record. Mpatamanga and Ruzizi III are advanced-stage developments which are expected to bring competitive electricity in their respective countries and together benefit over 30 million people. Each project has a strong partnership group which we are excited to join. The Transaction marks the first of several transactions that we expect to announce over the course of the next 24 months in the African power space and provides us with a basis for further organic and inorganic growth in each of Uganda, Burundi, the Democratic Republic of Congo, Malawi and Rwanda,” said Andrew Knott, CEO of Savannah.
Klinchenberg is a joint venture company currently owned by Norfund (50.1%) and British International Investment (“BII”) (49.9%), the UK’s development finance institution. Klinchenberg has interests in a portfolio of hydropower assets, as set out below:
- an indirect 13.6% interest in the operating 255 MW Bujagali run-of-river hydropower plant (“Bujagali”) in Uganda;
- an indirect 12.3% interest in the 361 MW Mpatamanga hydropower development project (“Mpatamanga”) in Malawi; and
- an indirect 9.8% interest in the 206 MW Ruzizi III hydropower development project (“Ruzizi III”) spanning Burundi, the Democratic Republic of the Congo (the “DRC”) and Rwanda.
Located on the Victoria Nile in eastern Uganda, Bujagali is a 255 MW run-of-river hydropower plant, commissioned in
2012, which contributes approximately 31% of Uganda’s effective electricity generation capacity, producing
approximately 1,490 GWh of power annually. It benefits from a US dollar-denominated power purchase agreement with the Uganda Electricity Transmission Company Limited, Uganda’s principal power transmission utility, maturing in 2042. Project partners in Bujagali include a subsidiary of TotalEnergies (the French energy supermajor), BII, AKDN (the Aga Khan Fund for Economic Development), the International Finance Corporation (the “IFC”, a member of the World Bank Group), DEG (the Germany-owned investment company), Jubilee Holdings Limited (the East African financial services conglomerate) and the Government of Uganda. Image credit: Stantec
“I am delighted to see Savannah Energy PLC, a UK investor, taking a stake in these important renewable energy projects across East and Central Africa. This investment reflects the UK’s commitment to sustainable development on the continent and supports the success of projects that will deliver clean energy and economic opportunities in the region,” said John Humphrey, His Majesty’s Trade Commissioner for Africa.
“The annual return of 21% in USD from these projects shows that it is possible to develop profitable energy projects even in some of the world’s most challenging markets. The capital we free up will be reinvested in new projects that contribute to sustainable growth,” said Øystein Øyehaug, investment director at Norfund.
About Mpatamanga
Located on the Shire River in southern Malawi, the Mpatamanga hydropower project is a planned 361 MW traditional reservoir power plant. Mpatamanga is designed to double Malawi’s current installed generation capacity and materially reduce dependence on diesel-fired generation. Financial close is targeted for 2026, with the project expected to be financed through a combination of concessional and commercial debt alongside equity contributions from the sponsors, underpinned by World Bank guarantee structures. Once operational, Mpatamanga is expected to deliver robust cash flows through long-term offtake agreements with the Government of Malawi and a US dollar-linked tariff.
Project partners in Mpatamanga include the IFC, EDF (the French utility major), BII, a subsidiary of TotalEnergies and the Government of Malawi.
About Ruzizi III
Located on the Ruzizi River between Burundi, the DRC and Rwanda, the Ruzizi III hydropower project is a planned 206 MW run-of-river power plant. The project is designed to supply electricity to Burundi, the DRC and Rwanda under long-term, government-backed, take-or-pay power purchase agreements, providing predictable US dollar-denominated revenues. Once operational, Ruzizi III is expected to nearly double Burundi’s electricity generation capacity, increase Rwanda’s installed capacity by approximately 30%, and deliver much-needed reliable baseload power to eastern DRC.
Ruzizi III is expected to reach financial close in 2026, supported by a multi-lateral financing package with participation from the World Bank and other development finance institutions. Project partners in Ruzizi III include a subsidiary of TotalEnergies, BII, AKDN, the IFC, DEG and Energie des Grands Lacs (a specialised regional energy body fostering cross-border economic growth in the Great Lakes region).
Author: Bryan Groenendaal
