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Tembo Power seeks partner to finance run-of-river projects in Burundi

Mauritius-based independent power producer Tembo Power is seeking a partner to support the development of two run-of-river hydropower projects with a combined installed capacity of 22 MW in southwest Burundi. Expressions of interest are invited by 31 March from investors to invest in the development of the 9.6 MW Dama and 12.4 MW Sigu projects in the Rumonge and Bururi provinces, respectively.

The projects are now reaching their final development stage. The IPP expects the sponsors to construct the projects according to a project finance model. Tembo Power, together with its local partner, shall retain a 45 to 55 per cent stake in the projects, while the EPC contractor may subscribe to up to 10 per cent, leaving new investors with a 35 to 45 per cent stake, according to an announcement on its website. The terms of the partnership will consist in the combination of a reimbursement of the development expenses incurred so far, commitment to additional development capital to reach financial closing, and a premium for accessing the proposed stake.

The high-head, run-of-river projects have minimal environmental and social impacts, and are developed to the most stringent standards to attract international lenders, according to Tembo Power. Construction of both projects is expected to take around 24 to 26 months at a total cost of around US$ 65 million. They are expected to generate a combined annual output of 105 GWh. The company aims to achieve financial close for both projects in Q2 2023. The Dama project on the river Dama has been designed with a small storage capacity to be able to absorb higher flow in the shoulder seasons (spring and autumn) following cloud bursts or typical afternoon rain and regulate the releases for hydropower production. The Sigu project on the river Siguvyaye has been designed as a typical run-of-river project to minimize the environmental impact on the nearby Bururi Forest.

Founded in 2015, Tembo Power Holdings develops medium-sized hydroelectric projects, as well as photovoltaic projects (as part of hydro-solar hybrid systems) in Sub-Saharan Africa, with the aim to provide reliable and affordable electricity to remote areas of that region. The company currently holds a power portfolio of 13 projects, with an expected total capacity of around 300 MW.

Interested parties should submit an expression of interest by submitting the following documents: (i) Company/Fund profile; (ii) Track record in completing financial close of similar projects; and (iii) Evidence of financial capacity to participate in the financing of the projects. The required documents should be submitted by e-mail to info@tem.bo, no later than close of business on 31 March, Mauritius Time. Pre-qualified investors will sign a non-disclosure agreement before being provided with a full information package and an access to a data room, with a view to provide a non-binding offer by 15 May. Selection of the sponsor shall be made by 30 May, while binding partnership agreements with the selected investor shall be concluded by 31 August. The full invitation letter with full details about the project and the submission process can be downloaded from the company’s website at https://tembo.bo. Questions should be sent to the email address above.

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