The African Trade Insurance Agency (ATIDI) has given insurance cover to support the $7.7m Songa Energy’s 1.65 MW run-of-the-river hydro project on the Ruvyironza River in Burundi.
- •This will be the 2nd renewable energy IPP to connect to the national grid in Burundi, with the first being a 7.5 MW solar project that was also supported by ATIDI.
- •The project began construction shortly after a ground-breaking ceremony in May 2023 and is expected to reach commercial operations by the end of 2024.
- •The power from the project will be delivered to the national grid via a new 2.4km transmission line that will be constructed as part of the project.
“We have been in close contact with Virunga Power over the last few years as they have advanced their portfolio projects. We look forward to working alongside the Government of Burundi and partners such as Songa Energy and Virunga Power.” ATIDI Underwriter Coordinator Obbie Banda said.
The project, which will be the first hydro Independent Power Producer (IPP) in Burundi is set to benefit from ATIDI’s Political Risk Insurance, which will cover the risk of default by the Government of Burundi following an Arbitral Award under the Project Agreements.
The Burundian electricity sector is characterized by a high potential for increasing production from hydroelectric power, which remains a largely underexploited renewable resource for the country.
With less than 15% of the population having access to electricity, Burundi needs to develop its electricity production and supply to facilitate economic development. The electricity generated by the project will be sold exclusively to the Burundian national power and water utility, la Régie de Production et de Distribution de l’Eau et de l’Electricité (REGIDESO) under the terms of a 25-year Power Purchase Agreement (PPA).
The project has been developed by Songa Energy and is being financed by Virunga Power, which itself is a developer, investor, and operator of renewable power projects and rural distribution grids.
The Upper Ruvyironza project is one of two hydropower plants totaling 10.65 MW being developed jointly by Songa Energy and Virunga Power within Burundi. In December 2022, Gridworks – the UK government-backed investor in Africa’s electricity networks – announced an investment of USD 50 million, to fund new projects being advanced by Virunga Power.