BIO, the Belgian Investment Company for Developing Countries, and the Norwegian development bank, Norfund have partnered to support the development of a small hydro power station in Uganda, Rwimi SHPP.

BIO provides a $13m senior loan, while the mezzanine financing will be brought by Norfund.

The 5.6 MW greenfield project with two wind turbines is expected to generate 28 GWh per year.

"The project will positively impact Uganda’s development as it will add to the energy generation generating capacity with clean energy, reducing the reliance on thermal power plants," said BIO.

This clean energy will supply to commercial and industrial enterprises, which consume two-thirds of the electricity in Uganda.

Unreliable electricity supply is considered as one of the most important factors affecting business of large, medium and small enterprises.

Rwimi SHPP will be developed in western Uganda near the city of Kasese by Eco Power Holding, an experienced Sri Lankan hydro power developer.

"Rwimi is an illustration of South-South collaboration, with a Sri Lankan company expanding its operations in Eastern Africa, with the support of BIO’s financing," BIO said.

The generated energy will be bought by the Ugandan national transmission company UETCL.

The project was selected for the GET FIT Ugandan program, which facilitates the development of small-scale renewable energy private projects through the provision of a subsidy payable on top of the standard feed-in-tariffs as defined by the Ugandan regulator.

GET FiT is supported by international donors under the lead of the German development bank, KfW.

This program is considered as a model to foster development of small scale renewable energy projects, with 17 project selected in 4 rounds with an accumulated 152 MW of installed capacity or 852 GWh annual generation and four supported technologies.

The Rwimi project was among the first projects selected and has thus spearheaded the rollout of the program.