The African Trade Insurance Agency, (ATIDI) has provided support for Songa Energy’s pioneering 1.65 MW run-of-the-river hydro project located on the Ruvyironza River in Burundi.

Valued at USD 7.7 million, this project marks the country’s inaugural hydro Independent Power Producer (IPP) endeavour. It will benefit from ATIDI’s Political Risk Insurance, which safeguards against the risk of default by the Government of Burundi following an Arbitral Award under the Project Agreements.

Commenting on the deal ATIDI Underwriter & Acting RLSF Coordinator Obbie Banda said, “We have been in close contact with Virunga Power over the last few years as they have advanced their portfolio projects – it’s great to be in a position to celebrate this milestone as we continue to support electrification efforts, not only in Burundi but across the African continent. We look forward to working alongside the Government of Burundi and partners such as Songa Energy and Virunga Power, to support similar efforts as we all make our collective efforts towards the attainment of SDG 7 – access to energy for all,”

The Burundian electricity sector is characterized by a high potential for increasing production from hydroelectric power, which remains a largely underexploited renewable resource for the country. With less than 15% of the population having access to electricity, Burundi needs to develop its electricity production and supply to facilitate economic development.

It is in this context that the Upper Ruvyironza project is being implemented. The project began construction shortly after a groundbreaking ceremony in May 2023 and is expected to reach commercial operations by the end of 2024.

“We are excited by the partnership with ATIDI and see significant value in their support for our Songa Energy investment in Burundi. By bringing local knowledge and developing products that fit the needs of the country, ATIDI is unlocking capital in unique ways. We look forward to a long-term “win-win” partnership with the Government of Burundi to ensure reliable, clean energy is available for the population,” Virunga Power Founder & CEO Brian Kelly said.

The electricity generated by the project will be sold exclusively to the Burundian national power and water utility, la Régie de Production et de Distribution de l’Eau et de l’Electricité (REGIDESO) under the terms of a 25-year Power Purchase Agreement (PPA). The power from the project will be delivered to the national grid via a new 2.4km transmission line that will be constructed as part of the project.

The project has been developed by Songa Energy and is being financed by Virunga Power, which itself is a developer, investor, and operator of renewable power projects and rural distribution grids. The Upper Ruvyironza project is one of two hydro power plants totalling 10.65 MW being developed jointly by Songa Energy and Virunga Power within Burundi. In December 2022, Gridworks – the UK government-backed investor in Africa’s electricity networks – announced an investment of USD 50 million, to fund new projects being advanced by Virunga Power.

This will be the second renewable energy Independent Power Project (IPP) to connect to the national grid in Burundi, with the first being a 7.5 MW solar project that was also supported by ATIDI.

About ATIDI

ATIDI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATIDI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATIDI has supported USD 85 billion worth of investments and trade into Africa.

For over a decade, ATIDI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATIDI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.

About Virunga Power

Virunga Power is a developer, investor, and operator of renewable power generation and distribution networks in East and Southern Africa. Its distributed portfolio of assets spans five countries and includes run-of-river hydropower plants in development, construction, and operations, and electricity distribution networks that bring power to households and businesses in rural areas.