The project sponsors and shareholders are a consortium of AKFED (the Aga Khan Foundation for Economic Development) group companies (i.e., AKFED, Industrial Promotion Services (Kenya) Ltd and Jubilee Insurance), CDC UK (the UK’s Development Finance Institution) and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power (Sithe Global).

The total amount of funds required to refinance BEL’s existing loans and to fund costs associated both with the prepayment of existing loans and the refinancing, is estimated to be of up to c.$500 million. This amount is expected to be financed through long-term senior debt. IFC intends to provide an A Loan of up to $100 million and a B Loan of up to $60 million. In addition, IFC will also help raise the debt financing needed to complete the financing plan and will provide client risk management instruments (interest rate hedging).

The Project is located on Dumbbell Island on the Nile River, approximately 8 kilometers north of the town
of Jinja, in Uganda.

In recent years, the Government of Uganda ("GOU") has shown a strong focus on the country's rapid industrialization by catalyzing growth in the manufacturing sector. The spillover effects of a country's strong manufacturing sector cannot be overstated: they include growth in productivity, the potential for diversification into a variety of economic activities, increased value addition vis-Ã -vis other primary sectors and creation of new employment opportunities. In support of this objective, the GOU is implementing a three-pronged approach for the electricity sector of (i) lowering electricity tariffs, (ii) increasing generation; and (iii) increasing electricity access. These are critical steps in increasing the competitiveness of the electricity sector, and by extension the manufacturing sector, compared to other countries in the East Africa region.

In this context, the proposed transaction is key in making electricity generation more affordable, given that the Project contributed c.44% of the country's energy generation and c.65% of its 2016 generation costs, as disclosed by the Electricity Regulatory Agency (ERA). Reducing the cost of generation is the first step towards reducing tariffs for end users and catalyzing economic growth. Furthermore, the resulting tariff reduction is expected to improve the power sector sustainability and is in line with the GOU's increasing electricity access agenda. To this end, the GOU is also considering several incentive programs to increase demand for electricity and generally boost economic activity in the country.

IFC, along with IDA and MIGA, played a key role in the development, construction and financing of the Project since its inception. The Project's commissioning in 2012 played a key role in displacing expensive thermal generation; it also relieved the country from significant load shedding and facilitated the return of the power sector to financial sustainability, and has since allowed Uganda to meet incremental demand growth with least cost based power generation. Therefore, IFC's role in in the proposed new investment is a continuation of its earlier role and provides continuity to IFC's long-term engagement in Uganda's electricity sector. The proposed refinancing project is a first-of-akind in Sub Saharan Africa and IFC's involvement is key such as to (a) engage with GOU, the regulator and other key stakeholders to ensure that a robust and bankable structure is in place, thereby leveraging on IFC's knowledge of Uganda's power sector and IFC's expertise in structuring IPPs in Sub-Saharan Africa, including the original financing of the Project; (b) provide and mobilize long term financing (15-year maturity) - only available from international sources - to achieve the goal of maximizing the Project's tariff reduction, in contribution to GOU's sector goals; and (c) ensure that all stakeholders continue to adhere to adequate environmental and social standards.

The existing project, Bujagali Energy (#24408), was categorized as an A. Although this refinancing will result in no new environmental and social impacts and the operational risks of the HPP are lower than the construction phase risks and impacts that led to the original categorization, the original A category will be retained. This categorization reflects the large size and relative importance of this project to Uganda and to IFC, in addition to the potential significance of certain ongoing risks, notably in relation to aquatic ecology.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.