Nairobi, 14 November 2024 – The African Trade & Investment Development Insurance (ATIDI) announced its approval to provide support via the Regional Liquidity Support Facility (RLSF) for Songa Energy’s 1.65 MW run-of-the-river hydroelectric project on the Ruvyironza River in Burundi. The project, which has been financed at a total cost of USD 7.72m, was developed by Songa Energy with equity financing from Anzana Electric Group. The project aims to support Burundi’s energy sector, contributing to the government’s efforts to improve electricity access to at least 60% by 2030 and promote sustainable power generation across the country.
ATIDI’s RLSF policy will provide crucial risk mitigation for the project by covering potential payment delays under the Power Purchase Agreement (PPA) entered into with Burundi’s national power and water utility, la Régie de Production et de Distribution de l’Eau et de l’Electricité (REGIDESO). The RLSF policy will cover for up to six months’ worth of revenue for the Project Company over an initial tenor of five years; ensuring the project’s access to liquidity in the event of payment delays.
Once completed, this will be the second renewable energy Independent Power Producer (IPP) to connect to the Burundian national grid, helping meet the country’s growing energy needs. ATIDI’s involvement underscores its commitment to supporting energy infrastructure that drives sustainable economic growth in Africa.
Burundi’s energy sector is characterized by a high reliance on hydroelectric power, which remains significantly underexploited. The main sources of energy consumed in the country include biomass (primarily wood), petroleum products, electricity from hydropower sources and peat. The Burundian government has prioritized energy development, particularly through baseload renewable sources like hydropower. This initiative aligns with the United Nations Sustainable Development Goal 7, which seeks to ensure access to affordable and sustainable energy for all by 2030.
This project becomes the second in Burundi to receive RLSF support; eighth overall in ATIDI’s member countries following similar support for renewable energy IPPs in Kenya, Malawi, and Uganda. The RLSF policy, designed to mitigate liquidity risks, plays a pivotal role in attracting foreign investment and ensuring the financial sustainability of essential infrastructure projects; contributing to the broader objective of accelerating electricity access and improving livelihoods across sub-Saharan Africa. The approval of this RLSF policy by ATIDI is in addition to a separate Political Risk Insurance policy issued in support of the Upper Ruvyironza project in March 2024.
Quote from Manuel Moses, CEO, ATIDI
“ATIDI is committed to fostering sustainable energy solutions across Africa; our support for the Upper Ruvyironza Hydro Project exemplifies this dedication. By partnering with innovative projects that enhance electricity access, we are not only contributing to Burundi’s energy landscape but also driving economic growth and improving the lives of millions. This initiative aligns with our objective to empower member states and support their sustainable development goals.”
Quote from Brian Kelly, Director, Songa Energy
“The RLSF solution is incredibly helpful to have in place, especially in markets that are relatively new to IPPs. This product provides meaningful comfort to both project sponsors and lenders, and it helps our utility off-take partner build a track record of regular payments while reducing the cost burden of making an alternative liquidity buffer available. We are very excited to be expanding our partnership with ATIDI in Burundi and look forward to working together during implementation and on future projects.”
