September 7

Press Release: Virunga Power Launches New Country-Scale Distribution Utility in Burundi

The creation of a new privately-owned and operated electricity distribution company that will bring grid power to almost 70% of Burundi’s population was announced at the Africa Climate Summit in Nairobi today. The new company, Weza Power, is the result of a multi-year development partnership between Virunga Power (a Gridworks investee company) and the Government of Burundi.

Over a seven-year period Weza Power will aim to connect 9 million people. The new company will provide electricity to residential and business customers across peri-urban and rural Burundi, which has one of Africa’s lowest electrification rates. Only 12% of the country’s 12 million people currently have access to electricity, with that number falling to 2% in rural areas. Most of the new household customers currently burn kerosene and charcoal for energy, while businesses have to rely on expensive and polluting diesel generators.

Gridworks, which is owned by British International Investment, the UK government’s development finance institution, became a controlling shareholder of Virunga Power in March 2023 following a US$50 million investment. Virunga Power is developing the Weza Power project and will provide the initial equity investment. Other committed financing partners providing development and construction capital include the US government’s Power Africa initiative.

The project will be the first new private-sector electricity distribution company operating at a national level in sub-Saharan Africa for a decade. There has been growing interest in the role of the private sector in Africa’s electricity networks in recent years, but Weza Power marks a major step forward for the sector and will demonstrate a grid connected model for delivering new electricity connections at scale.

This week’s announcement takes place at the Africa Climate Summit, under the theme, “Driving Green Growth & Climate Finance Solutions for Africa and the World”. It sees the partners in the public private partnership (PPP) embark on a new interim agreement that will mobilise an initial, two-year US$60 million investment into the utility. This initial phase will result in approximately 300,000 Burundians gaining access to grid electricity.

The project will then aim to raise around US 1.4 billion over seven years to build a network of distribution infrastructure that connects two-thirds of the East African country – it will do this without the Government of Burundi needing to raise additional loans from its own balance sheet, meaning it is able to focus on other national priorities.   The new utility company will be connected to Burundi’s existing transmission network operated by REGIDESO, the state-owned utility company that will continue to generate power from clean, run-of-river hydropower, and supply distribution-level power to the country’s main urban areas.

The financing for the grid expansion and the creation of a new utility operator in Burundi will come from a blend of private and public funding, including commercial equity and debt, climate-based and other concessional funding, multilateral donor support, and private grants. While the PPP is focused on Burundi, Gridworks and the partners believe its impact may be even greater as a model which can be repurposed for other national and subnational electricity grid expansion efforts across Africa.

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Source: GridWorks Development Partners (link opens in a new window)

distribution, renewable energy, rural development