Media And News
PRESS RELEASE: Achievement of commercial operations of Sindila: a 5.25mw run-of-river hydropower project in western Uganda
Metier is pleased to announce that start of commercial operations was achieved in 18 April 2019 for the 5.25MW Sindila hydropower project (“Sindila”) in which Metier, via its Lereko Metier Sustainable Capital fund (“LMSC”), is the majority investor. Sindila is located in the Bundibugyo District of western Uganda and is owned by a special purpose vehicle, Butama Hydro Electricity Company.
Sindila benefits from its location in the foothills of the Ruwenzori Mountains and is a high-head run-of-river project with a total gross head of 402m which is used to drive two pelton turbines of 2.8MW each. The water is conveyed via an enclosed steel low-pressure headrace and high-pressure penstock from a tyrolean weir to the powerhouse.
Minority shareholders alongside Metier are KMRI, the original project developers; Fieldstone Africa Investment Resources (“FAIR”) and WK Power. KMRI LLC is a US based developer specializing in developing small-distributed renewables in emerging markets to institutional project finance standards. KMRI developed Sindila for few years and arranged the project construction equity and debt. FAIR, a development support arm of Fieldstone, provided development funding alongside LMSC as well as active development support.
WK Power is a wholly-owned subsidiary of WK Holdings, a privately held South Africa construction group of companies which is both the Civils Engineering Procurement and Construction contractor on the project as well as the operator via its Ugandan entity, Sindila Hydro Construction. The electro-mechanical contractor and turbine supplier is the Slovenian firm, Kolektor Turboinštitut. The Uganda and South African offices of SMEC provided Owner’s Engineer and project management services, Aurecon acted as the lender’s independent engineer and Synergy Global Consulting provided social and environmental management support during construction.
The project is funded by a combination of debt and equity with debt provided by the Overseas Private Investment Corporation (“OPIC”), the US development finance institution. The project represents an investment of USD20 million into the Uganda power sector and created well over 500 jobs at peak employment, the majority of which went to workers from the local community.
Sindila is part of the Government of Uganda and KfW GETFiT programme and benefits from a support grant under the programme. The project development was also supported by the United Nations Environment Programme Seed Capital Assistance Facility (“SCAF”) which provided a valuable development matching grant.
The project will generate approximately 28GWh of electricity per year which will be purchased by the Uganda Electricity Transmission Company Limited (“UETCL”) under a 20-year power purchase agreement. It will consequently reduce greenhouse gas emissions by about 15,120 tonnes of CO2 per year based on the standard Uganda grid emissions factor.
The project has also implemented a range of socio-economic development projects in the area. The local economy is based on subsistence and cash farming and local households have no formal infrastructure services. Project initiatives include a stand-pipe water reticulation system for households who currently collect water from the river, a bean-planting programme and other agricultural support, anti-poaching and other measures to protect the nearby Ruwenzori Mountain National Park and a planned solar-homes programme to provide electricity to households in the vicinity of the plant.
Sindila was retrospectively granted a certificate for achievement of commercial operations on 18 April 2019. It has been supplying power to the national grid since that date and is now in its operating phase. Operations have been slightly hampered by an unstable grid connection, however the project is working closely with UETCL and the Rural Electrification Agency of Uganda who have been very supportive of the project and are in the process of implementing a major grid strengthening programme between the project site and Fort Portal, the nearest major town, which will improve the stability of power evacuation.
Metier looks forward to the project continuing to be an important contributor to the energy sector and economy of Uganda in the years to come.
Metier is a proven leader in the area of private equity, alternative assets and related advisory services. The company was founded in 2004 and raised South Africa’s largest private equity fund in terms of third party local commitments. It has an established team which ranks amongst the largest and most experienced in the industry. Metier has a strong track record in private equity investing and selective M&A advice that confirms its leadership status.
The Metier Sustainable Capital Practice (MSCP) has garnered significant traction since its inception. The Lereko Metier Sustainable Capital Fund (LMSC) achieved a final close of R690 million in November 2013. Subsequently, aggregate funds under management, including co-investment pools, have more than doubled to a level of R1.4 billion. The increase has occurred due to significant co-investment opportunities being secured and executed. The practice leverages the experience of its senior team members who cumulatively offer in excess of 30 years clean energy and resource efficient infrastructure experience, as well as the growing experience of the full MSCP team.
The practice targets investment in energy efficiency, renewables, water and waste management businesses and projects supporting Africa’s development objectives and environmental commitments. The MSCP team have delivered multiple investments spanning multiple renewable energy technologies including Wind, Solar Photovoltaic, Concentrated Solar Thermal and Micro-Hydro. The practice is in the process of closing a follow-on fund, Sustainable Capital 2.
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