A US$350million deal to finance an 80 megawatt (MW) peat to power project in Rwanda, which will improve access to electricity for the three quarters of the country's population that is currently off the grid, has reached financial close.

The power plant, which is expected to increase installed capacity in Rwanda by 40%, will utilise the Country's significant peat reserves to improve the national installed generation capacity.

Despite its status as one of Africa's fastest-growing economies, only 25% of Rwanda's population currently has access to reliable electricity. The plant is being constructed in the Mamba Sector of Gisagara District, one of the most remote areas in Rwanda, and is expected to be completed within three years.

The Africa Finance Corporation is the Mandated Lead Arranger for the project debt, and has successfully arranged total senior debt facilities of US$245 million, contributing US$75 million in loans and providing an underwriting commitment of US$35 million.

Finnfund, a Finnish Development Finance Company, served as the lead arranger for total mezzanine debt facilities of US$35 million for the project. The other lenders are Eastern and Southern African Trade and Development Bank(TDB)African Export-Import Bank (Afreximbank), Export-Import Bank of India, and Rwanda Development Bank (BRD).

The project is sponsored by Hakan Madencilik A.S - an energy company from Turkey, and Quantum Power - a power and energy infrastructure investment platform. Themis Infra, an infrastructure development firm, is the Project Development Manager.

Andrew Alli, CEO of AFC, commented on the announcement: "The move from costly external imports of fuel to more sustainable indigenous sources of energy such as peat will reap great rewards for Rwanda, not just in terms of the significant savings in foreign exchange hitherto used in importing expensive diesel oil for power generation, but also the positive economic and social benefits of providing more cost effective power for businesses and industries, as well as more affordable power for the people".

"AFC prioritises investing in projects that will have significant advantages for the local community, which this plant will. It will also make a huge contribution to powering Rwanda's economic growth in the future, in line with the government's objectives." Rwanda aims to provide 70% of its 12 million people with power from the grid or off-grid by 2018, and the country intends to become a lower middle-income country by 2020