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IG for the Ruzizi III Project

Region
Central Africa
Sector
Energy
Scope
IG
Grant Amount
EUR 22,000,000
Total project cost
EUR 552,000,000
Status
Approved
PFG Lead Financier
EIB
PFG co-Financier
AFD, KfW, AfDB

The project consists of the construction of a 147 MW Hydropower Plant on the Ruzizi river bordering DRC and Rwanda. It will be developed as a Public Private Partnership, through a concession provided to a private investor to develop, build, operate, and maintain the plant. Ruzizi III would be the third hydropower development on the river following Ruzizi I ("RI" - 29.8 MW) and Ruzizi II ("RII" - 43.8 MW). Reinforcement and extension of the transmission and distribution system in the DRC, Rwanda and Burundi will allow the evacuation of the additional 147 MW that will be produced by the new Ruzizi III hydropower plant.Further to the finalisation of the feasibility studies and the selection of a preferred investor to develop Ruzizi III, negotiations led to the signing of a Project Term Sheet in September 2014. However, before all project documents can be signed and both the Sponsor and the lenders commit their funding (equity and debt) to RIII, which would allow RIII to commence construction, a number of key development activities are still required. This includes the undertaking of additional geological studies, updating of the ESIA, preparing and launching the bid and negotiation of the EPC contract as well as the Operations and Maintenance Agreement, and the further development and negotiation of all project documents. In addition, lenders will have to conduct the due diligence of the project.

The original EU-AITF technical assistance grant of EUR 2.8m, approved in May 2008, has been used by EIB to finance additional and complementary studies for the preparation of this project, mainly focusing on the development of an institutional framework for the management of the Ruzizi cascade, bankability of the project and additional technical studies for the interconnection of South Kivu and North Kivu and their interface with the CEPGL interconnected network.

In April 2010 the EU-AITF Executive Committee approved an increase of the TA grant to a total of EUR 4.2m for the funding of a second phase of project preparation, consisting of the preparation of an ESIA and development of an institutional framework for the management of the project associated water resources namely Kivu Lake and Ruzizi River. The institutional studies have resulted in the proposal of an International Treaty and creation of a Basin Agency that were approved by the Ministers of Energy of DRC, Rwanda and Burundi in July 2011.

06/2017