Hydropower Plant Feasibility Study in Rwanda

Delphos International served as a financial advisor to the Government of Rwanda's ("GoR") Ministry of Infrastructure for the financing of two greenfield, run-of-the-river hydropower facilities, a 27.8 MW capacity facility in Nyaborongo and a 9.5 MW capacity facility in Rukarara. As financial advisor, Delphos International analyzed alternative ownership and financing structures to meet a variety of objectives, advised GoR in discussions with the World Bank and the International Monetary Fund ("IMF") with regards to respecting external financial covenants while building the Project, and analyzed impacts on levelized tariffs using a detailed proforma financial and economic model.

The financial and economic model assessed the various financing and ownership structures (e.g. IPP, PPP, Concessional Financing) against the minimum levelized tariff required to recover the debt and equity. Certain financing scenarios had higher weighted average costs of capital (such as a scenario with greater involvement of private investors), and thus a higher return and tariff were required. The tariff level vis-a-vis the amount of government debt or foreign investment was a critical issue for the GoR not only for the new national electricity tariff average, but also for the management of various risks to be assumed and the maintenance of external financial covenants (e.g., debt ratios).

The model was shared with the World Bank and GoR in order to assess the project's implications on Rwanda's sovereign debt covenants. The $364,740 grant funding the tender was provided to GOR by the U.S. Trade and Development Agency ("USTDA").

Project Details

Client Name: 
Government of Rwanda

Location Region: 
Central Africa

Services Provided: 
Advisory Services & Business Development

Energy (Renewable)