A $350-million deal to finance an 80 MW peat-to-power project in Rwanda, which will improve access to electricity for the three-quarters of the country’s population that is currently off the grid, has reached financial close.
The power plant, which is expected to increase installed capacity in Rwanda by 40%, will use the country’s significant peat reserves to improve the national installed generation capacity.
Despite its status as one of Africa’s fastest-growing economies, only 25% of Rwanda’s population has access to reliable electricity.
The plant is being built in the Mamba sector of Gisagara district, one of the most remote areas in Rwanda, and is expected to be completed within three years.
Multilateral development finance institution Africa Finance Corporation is the mandated lead arranger for the project debt, and has successfully arranged total senior debt facilities of $245-million, contributing $75-million in loans and providing an underwriting commitment of $35-million.
Finnish development finance company Finnfund served as the lead arranger for total mezzanine debt facilities of $35-million for the project.
The other lenders are Eastern and Southern African Trade and Development Bank, African Export-Import Bank, Export-Import Bank of India and Rwanda Development Bank.
Rwanda aims to provide 70% of its 12-million people with power from the grid or off-grid, by 2018, and the country intends to become a lower middle-income country by 2020.