Jubilee Holdings (JHL) has acquired an additional 9.44 percent interest in Bujagali’s equity from the technical partners SN power for a consideration of US$ 40 million (Sh4.2 billion).
The transaction increases JHL’s shareholding in Bujagali Energy Limited (BEL), the special purpose company that owns the 250MW Bujagali Hydropower Project (“Bujagali”), from 8.8 percent to 18.24 percent.
The budget for building Bujagali was approximately US$ 900m and was funded through a combination of equity and debt financing.
Jubilee Holdings Limited Group Chariman Nizar Juma commented, “We are very pleased with this additional investment in Bujagali and we have confidence that it will continue to provide us with stable and consistent returns as has been the case with all our existing investments.”
The additional investment in Bujagali is part of JHL’s strategy to hold a broadly diversified and conservative portfolio of investments totalling to Sh111.2 billion, as part of the total assets of Sh 130.2 billion as at 31st December 2019.
The key investment holdings include quoted securities, government bonds, real estate, unquote securities and projects that generate US dollar returns, including interests in Farmer’s Choice, PDM and Seacom.
Two years ago, after the exit of former partners Sithe Global, the opportunity to buy additional interest by JHL from SN Power arose.
The handover was settled around the financing arrangements and has now been realised. SN power, which remain with an economic majority of 55.45 percent shares in BEL, invests in clean, renewable energy on a commercial basis in emerging markets.
Hydropower is key focus for the company and is wholly owned by Norfund, the Norwegian investment Fund for Developing countries.
Billed as the most successful pubic private partnership in the power sector, the Bujagali hydropower project has been used a template for successive projects in the region.
Commissioned in August 2012, Bujagali has boosted the economic growth of Uganda that has previously experienced inadequate and unreliable power supply.
It remains the first independent power producer in Uganda and one of the largest Clean Development Mechanism project.
“JHL would like to extend its appreciation to all partners and stakeholders that have supported us in completing this deal,’’ added.
To this end, Bujagali’s cumulated power availability is 99.6 percent (against 96 percent contracted) and until the recent commissioning of Isimba hydropower plant early this year, Bujagali provided up to 50 percent of Uganda’s electrical energy requirements.
More than 200,000 jobs have been created by the project and is supporting over 800,000 new electricity connections since its commissioning while improving air quality by reducing carbon dioxide emissions by approximately 1 million tons per annum.