Gide assisted the Organisation for Energy of CEPGL (EGL) and the government of the member States (Burundi, the Democratic Republic of Congo (DRC) and Rwanda), as well as their respective national utility companies (REGIDESO, SNEL SA and EUCL) on negotiating the agreements for the Ruzizi III hydroelectric power plant project. The negotiations, which started in 2012, led to the signing of the project agreements this Monday, July, 29th , in Kinshasa.
The Ruzizi III project consists on the construction of a 147 MW-capacity hydroelectric power plant located on the river Ruzizi, downstream from the existing Ruzizi I and Ruzizi II hydroelectric power plants. The Ruzizi river runs from Lake Kivu through to Lake Tanganyika in central Africa, and acts as borders between the DRC and Rwanda and the DRC and Burundi.
These project agreements provide for the respective obligations of EGL, the three member States, their national utility companies and the project company incorporated by the private partners, IPS (Kenya) Ltd (the branch of the Aga Khan Fund for Economic Development that is in charge of industry and infrastructure) and SN Power AS (renewable energy company owned by Norfund, the Norwegian investment fund for developing countries).
This project is an iconic electricity independent production project (IPP) in the African Great Lakes region. Based on a Build-Own-Operate-Transfer (BOOT) structure, the project is backed by a 25-year concession agreement and electricity purchase agreements entered into with each of the national utility companies for an equal share purchase of the electricity generated by the project.
Costing an estimated USD 650-700 million, the Ruzizi III project aims to generate electricity for populations living in the African Great Lakes region. It is widely supported by international financial institutions (the World Bank, the African Development Bank, the Kreditanstalt für Wiederaufbau (KfW), the French development agency (Agence Française de Développement, AFD), the European Investment Bank, the European Union), which are ready to contribute in a great proportion to the financing of the project in order to maintain an affordable tariff of electricity generated by the plant. Financing considered for the project is a unique combination in Africa of concessionary funds, subsidies, commercial debt and private funds.
Gide's team was headed by partners Stéphane Vernay and Marie Bouvet-Guiramand, working with counsel Alix Deffrennes and associate Claire Labouré, all members of the firm's Projects (Finance & Infrastructure) practice group.
SN Power AS and IPS (Kenya) Ltd. were advised by Covington and Burling LLP.