Gridworks To Invest $50 Million In Virunga Power To Ramp Up Run-Of-River Hydro Projects Across Several African Countries

Gridworks, is a UK government-backed investor in Africa’s electricity networks. It is wholly owned by British International Investment, the UK’s development finance institution. Gridworks invests in transmission, distribution, and distributed renewable energy, both on and off-grid. Gridworks says that its focus is to create development impact by connecting Africa’s people and businesses to reliable, affordable, clean power.

Distributed mini hydro plants around perennial rivers offer opportunities to provide reliable baseload power for rural communities. Virunga Power, a leading rural electric utility on the African continent that develops, invests in, and operates distributed renewable power generation and grid distribution projects, has a strong focus on run-of-river small hydro generation between 1 MW and 20 MW installed capacity. Virunga has built a pipeline of these mini hydro projects in several East and Southern African countries including Burundi, Malawi, Zambia, and Kenya. To help accelerate these projects, Gridworks is investing up to $50 million in Virunga Power.

More than 600 million  people in Africa still do not have access to electricity. People in rural areas are most affected. According to the World Bank, Zambia, Malawi and, in particular, Burundi have some of the world’s lowest rural electrification rates (15%, 6%, and 2%, respectively). These kinds of distributed mini run of river mini hydro projects will play a critical role as part of the energy mix to increase access to electricity on the continent. Virunga Power says it works with its newly connected communities to generate new income by using electricity to stimulate industrial and commercial activity. The company works with local financing and community development partners to help foster ecosystems that can drive productive uses of energy at the household, village, and industrial levels. For example, this includes helping customers buy machinery that can improve farming yields and boost income.

As more of these villages get electrified, it presents a great opportunity to enhance communication and transport services. Enhanced telecommunication services will facilitate financial inclusion through mobile money services in these villages. There is now a growing electric mobility sector in the region centered around electric motorcycles and tuk-tuks. These will now be able to operate in these newly electrified villages, improving the quality of life of residents by providing access to transport services.

Virunga Power’s current institutional backers include EDFI ElectriFI, the EU-funded Electrification Financing Initiative, and the Camco-managed Renewable Energy Performance Platform (REPP), which are leading investors in early-stage energy access and renewable energy companies in Africa.

Here are some quotes from the parties involved:

Welcoming the announcement, Gridworks’ CEO, Simon Hodson, said: “I’m delighted to announce our investment in Virunga Power. Access to reliable, clean, affordable energy is a catalyst to a better life, but this is currently out of reach for people in the rural areas that Virunga Power wants to serve. We’re committed to making Virunga Power our platform to build hydro-powered rural utilities in at least four countries in Southern and Eastern Africa. Our capital will help them to close the energy access gap and unlock opportunities for people across the region.”

Brian Kelly, CEO of Virunga Power, said: “We’re thrilled to be able to announce this transformational investment from Gridworks. An investment of this magnitude validates the approach we take to bringing clean and affordable power at scale to rural areas. Our pipeline and portfolio of utility projects continues to grow, and we will use the capital and expertise from Gridworks to expand electricity access and drive economic and industrial growth in communities across the region.”

Jean-Denis Collin, ElectriFI Manager at EDFI Management Company, said: “Over the past four years, EDFI ElectriFI, sponsored by the European Union, together with Power Africa, and the governments of Sweden and Italy, were instrumental in validating the model and further secure a pipeline of run-of-the-river hydro projects in East Africa. Gridworks’ investment is timely and catalytic; it brings additional expertise and capital to further convert the pipeline and build a strong hydro-powered rural utility platform in Southern and Eastern Africa. Congratulations to all involved.”

Ben Hugues, REPP Lead at Camco, said: “As an early-stage investor, we have long since seen the enormous potential of Virunga Power in delivering transformative impact to communities across the region. Our confidence in and support for the company has enabled it to grow to the point where it has been able to secure this pivotal investment from Gridworks, which will help the company deliver on its exciting expansion plans.”

Image courtesy of Gridworks