Updated project status

In 2014, the GET FiT portfolio have grown through a second RfP Round for hydro, biomass and bagasse projects, along with the first solar PV RfP concluded in October/ November. The portfolio now counts 17 projects: ten hydro, one biomass, two bagasse and four solar PV power projects. Several of the hydro-, biomass– and solar power projects are on the verge of financial close and construction start, while the bagasse projects are expected for commissioning in 2015. A brief and updated status for each project is provided below. 

The location of all projects that have been approved for GET FiT support are indicated on the map below (figure 10). Most of the proposed hydropower projects are located on the rivers of south-western Uganda. 

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Figure 7: Geographic distribution of projects approved in RfP 1 & 2 and solar

 

  • Nyamwamba. Run-of-river hydropower plant with an installed capacity of 9.2 MW and estimated 39 GWh annual production. Project is located in the Kasese district. Investment of MUSD 26.8 with MUSD 5.8 in GET FiT commitments. Expected commercial operation date is Q1 2017. The project has all of the required licenses and Nyamwamba was first in line to sign their Developer Finance Agreement (DFA) in November 2013. Ground-breaking, which was initially planned for June, had to be postponed due to flooding. It is not likely to happen before early 2015, since crucial infrastructure (road and bridge) has been affected and need to be replaced by relevant GoU entities. Furthermore, major changes to the overall plant design have also caused a significant project delay: Intake, power station and lower part of the penstock have been re-located in order to reduce the risk of future flood damages. Nyamwamba is in fact one of the more challenging projects also in terms of interconnection, requiring a 20 km dedicated medium voltage line through challenging terrain in the Rwenzori foothills. REA is committed to constructing the line in a timely manner with respect to expected commissioning date of the project.


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Flood damages at Nyamwamba documented during GET FiT Supervision visit in June 2014 (Photo: GET FiT)      
 

 

  • Rwimi. Run-of-river hydropower plant with an installed capacity of 5.5 MW and estimated 27 GWh annual production. Project is located in the Kasese district. Investment of MUSD 20.8 with MUSD 3.9 in GET FiT commitments. Expected commercial operation date is Q4 2016. The project has all required licenses and signed DFA. PPA and IA negotiations are in advanced stages. The project is nearing financial close and construction start is expected in early 2015. The previous supervision visit indicated that work still remains on the calculations of compensation for economic displacement to bring this up to the required standards. In addition, the fish ladder and aquatic ecology would benefit from further considerations.
     
  • PH Industrial Farm’s. 1 MW biomass (gasified maize farm waste) plant in Gulu Region. Expected annual production is 7 GWh. Total investment of MUSD 3.5 with MUSD 0.5 in GET FiT commitments. Expected commercial operation date in mid-2015. The developer has successfully selected a construction company and is prepared for implementation. However, an updated Environmental and Social Impact assessment which meets IFC performance standards is required before GET FiT support can be contractually committed.
     
  • SAIL Cogen. 6.9 MW biomass (bagasse from sugar production) plant in Kaliro district. Expected annual production is 104 GWh (roughly half of this, up to 48 GWh goes onto grid, while the remaining will supply energy for the sugar production on site). Investment is MUSD 21.6 with MUSD 2 in GET FiT commitments. Expected commercial operation date in early 2015. The generation unit is already supplying the sugar factory. Although significant progress has been made during 2014, e.g. completion of the waste water treatment plant, there remain outstanding issues on the environmental and social side before GET FiT support can be contractually committed.  
     
  • Kakira Cogen. 20 MW biomass (bagasse from sugar production) plant in Butembe County. The plant is expected to deliver up to 147 GWh to the grid. Total investment is MUSD 60.7 with about MUSD 7.1 in GET FIT commitments. After an agreement on the renewable energy feed-in tariff and related premium level was reached in June/ July, the developer is in advanced PPA and DFA negotiations.  Discussions with GET FiT focus on the electricity output that can realistically be expected from the plant and the IFC compliance of workers accommodation. It is expected that the agreements can be concluded and commercial operation starts in Q1 2015. 


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Effluent Water Treatment Plant at Kakira under construction during GET FiT Supervision visit in June 2014 (Photo: GET FiT)

  • Nengo Bridge. Run-of-river hydropower plant with an installed capacity of 6.7 MW and estimated 35 GWh annual production. Project is located in Kanungu district. Investment of MUSD 30 with MUSD 5.1 in GET FiT commitments. Expected commercial operation date is Q1 2017. The developer has submitted a generation license application and financial close is expected in early 2015. Notably, Nengo Bridge developers were the first to sign the IA and have signed the PPA. Lenders are carrying out their due diligence, and provided that a generation license is provided, financial close construction start in February 2015 is likely. The hydrological base for the project is particularly good, with 51 years of flow data available for a gauge in the same river basin, just 10 km downstream of the intake.
     
  • Muvumbe. Run-of-river hydropower plant with an installed capacity of 6.5 MW and estimated 31 GWh annual production. Project is located in Kabale district. Investment of MUSD 14.1 with MUSD 4.5 in GET FiT commitments. Expected commercial operation date is Q1 2017. Despite only being approved in the second round, the developer has good momentum with a technically relatively simple project with good fundamentals. However, the developer must make a comprehensive update to the Environmental & Social Impact Assessment before the DFA can be signed, expected in early 2015. PPA/ IA discussions were initiated in June and are expected to be concluded shortly. Construction start is expected in Q1 2015.
     
  • Lubilia. Run-of-river hydropower plant with an installed capacity of 5.4 MW and expected 25 GWh annual production. Project is located in Kasese district. Investment of MUSD 18.7 with MUSD 3.2 in GET FiT commitments. Expected commercial operation date is Q1 2017. DFA signed. The project is being developed by Frontier, who is also promoting Siti I & II. The developer signed the PPA in mid-January 2015 and their timeline puts financial close and construction start at January 2015. In terms of interconnection, Lubilia is ideally placed only 3.2 km from the existing grid, and it is expected that timely and adequate grid integration will not represent a challenge.
     
  • Waki. Run-of-river hydropower plant with an installed capacity of 4.8 MW and estimated 25 GWh annual production. Project is located in Bulisa district. Investment of MUSD 18.1 with MUSD 3.6 in GET FiT commitments. DFA for Waki was signed in June 2014, and ERA awarded the developer its Generation License in July. Construction start is expected in early 2015, but financial close not until June 2015. Expected commercial operation is in Q2 2017. Discussions during the previous supervision visit in June 2014 indicated that ongoing baseline studies, assessment of impacts and developing mitigation and compensation measures may not meet the requirements of the IFC Performance Standards and in some instances possibly not Ugandan regulatory requirements. There is likely to be need for additional work by qualified consultants to meet the environmental and social standards requirements in a timely manner.
     
  • Siti I. Run-of-river hydropower plant with an installed capacity of 6.1 MW and estimated 29 GWh annual production. Project is located in Kyosoweri, Eastern Uganda. Investment of MUSD 14.8 with MUSD 3.6 in GET FiT commitments. Expected commercial operation date is Q2 2016. DFA signed. The PPA was signed in mid-January 2015 and regarding the IA, negotiations are largely finalized and signing expected in early 2015 together with construction start. During the previous site visit in June 2014 it became clear that some environmental and social issues still required attention. The Developer was still addressing several issues of importance for compliance with Ugandan frameworks and IFC Performance Standards. Issues under IFC Performance Standards 5 and 6, concerning displacement / compensation and the National Park respectively, were particularly important and urgent. Since then, the Developer has made considerable and highly satisfying efforts to overcome these barriers. 
     
  • Siti II. Run-of-river hydropower plant with an installed capacity of 15 MW and estimated 72 GWh annual production. Project is located in Kyosoweri, Eastern Uganda. Investment of MUSD 34 with MUSD 10.2 in GET FiT commitments. DFA and PPA signed. Expected commercial operation date is in late 2017, as construction will be aligned with the progress of the Mbale – Bulambuli transmission project, which is required for power evacuation from Siti II. Siti I and II are situated in an area with significant additional hydropower potential, and in this regard the two projects may turn out to be important catalysts to i) reinforcement of the existing local grid and ii) further hydropower development in the area within and outside of GET FiT.
     
  • Kikigati. Run-of-river hydropower plant with an installed capacity of 16 MW and an estimated 115 GWh annual production. Project is located in the Isingiro district. Investment of MUSD 64.4 with MUSD 12.3 in GET FiT commitments. The Kikigati plant is located on a river between Tanzania and Uganda and a bilateral agreement is required between the two countries before the project can be implemented. While an agreement was drafted in 2013, Tanzania has so far not accepted to sign it– requesting fundamental changes in the technical design and the offtake arrangement. Consequently, project development has been completely on hold for more than a year. GoU has made serious efforts to resolve the problem and the project has been subject of high level bilateral discussions between Uganda and Tanzania, however, so far without success. In December 2014, KfW has requested GoU to make a final decision whether the project shall remain part of the Get FiT portfolio despite the apparent stalemate or whether funds should be reallocated to other eligible project under the currently ongoing RfP Round 3.
     
  • Sindila. Run-of-river hydropower plant with an installed capacity of 5 MW and 27 GWh expected annual production. Project is located in the Bundibugyo district. Investment of MUSD 17 with MUSD 3.3 in GET FiT commitments. Expected commercial operation date is in Q3 2017, with construction start in Q3 2015. However the developer needs to follow up on several Condition Precedents (both technical and Environmental & Social) before DFA can be signed. 
     
  • Soroti I & II. Utility scale, ground mounted solar PV power plants, located in the Soroti district. Peak capacity is 10 MWp (5MWp each) and average annual energy production is 17.6 GWh. Investment MUSD 27 with MUSD 9.5 in GET FiT Commitments. Following the decision to support the project, the developer is now finalizing its environmental and social assessment to obtain a permit from the National Environment Management Authority (NEMA).  If all permits and licenses as well as PPA and IA can be concluded within Q1 of 2015, financial close is to be obtained during Q2. Construction start expected also in Q2 with commissioning in early 2016 as an ambitious, but realistic target.
     
  • Tororo South & North. Utility scale, ground mounted solar PV power plants, located in the Tororo district. Peak capacity is 10 MWp (5 MWp each) and average annual energy production is 16.7 GWh combined. Investment MUSD 32 with MUSD 8.6 in GET FiT Commitments. If all permits and licenses as well as PPA and IA can be concluded within Q1 of 2015, financial close and construction start is expected during Q2 2015, with commissioning in early 2016.


In addition to the above, a few general observations can be noted;

  1. The critical window of opportunity is approaching. Provided that one can expect timely commissioning of the planned large hydro plants, the window for ensuring that GET FiT contributes to increased generating capacity and reduced reliance on fossil fuels in the coming years is narrowing. It is thus essential that all approved projects see progress in the coming months and that the projects applying in the final round are relatively mature.
     
  2. Delays on large hydropower projects prolong window of opportunity. However, the economic case for GET FiT is strengthened if one or more of the larger hydropower projects currently planned or under construction in Uganda (e.g. Karuma, 600 MW) are delayed. This is because the time window for potential displacement of thermal generation is prolonged. While it is too early to make adjustments to the expected commercial operation dates, the progress seen over the last years indicates that some delays are being experienced – mainly related to financing.
     
  3. Robust progress on enabling environment. Despite remaining challenges, all commercial actors in the space continue to applaud the efforts spearheaded by ERA, and supported by GET FiT, to ensure an enabling and predictable environment for investment, including the PPA and IA, quarterly tariff adjustments, speed up license approvals, etc.

 

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