Lack of sufficient and reliable electricity supply is a main constraint for economic development in most developing countries. Particularly this is the case in Sub-Saharan Africa, where electricity availability per capita has decreased over the last 20 years. Less than five per cent of technically exploitable hydropower capability is being utilized in the region. In Uganda, about 90 per cent of the population lack access to grid electricity, and the main electricity source is small diesel generators.
Norfund and TrønderEnergi have jointly developed a power plant on a river in Bugoye in the western part of Uganda, through the company TronderPower Ldt. Norfund owns 27.5 per cent and TrønderEnergi 72.5 per cent of the joint venture. The industry expertise for developing and running hydropower plants in TrønderEnergi has been extensively utilized, and both technology and competency transfer to the Uganda organization has been key to the success of the project. In the construction phase of the project, 425 local jobs where created both directly and for local sub-contractors. In the current operations 10 locals have full time employment at the power plant.
Norfund cooperated closely with TrønderEnergi throughout the development of the plant and the surrounding area. The power plant opened in October 2009, and it has a capacity of 13 MW. It is expected to produce 82 GWh per year, equal to 6.4 per cent of total electricity sales in Uganda in 2008.
The project is registered in the green development mechanism and is expected to reduce annual CO2 emissions in Uganda by approximately 54 kilotonnes. This means that the contributions to emission reductions can be monetized, contributing to the financial viability of the project. Ugandan authorities will receive 60 per cent of the revenues from the sale of these CO2 quotas.
In July 2015 Norfund’s shares in Tronder Power Ltd (Bugoye) was exited via a sale together with TrønderEnergi to Uganda Hydro Holdco, a 100% owned subsidiary of Africa Renewable Energy Holdings Ltd, managed by Berkeley Energy. The deal also included selling down Norfund’s share in the Kikagati and Nsongezi project companies to 30% and transferring the project development responsibility to Berkeley Energy’s Ugandan subsidiary Maji Power.