Weza Power, a new privately-owned electricity distribution company, has launched with the goal of bringing grid power to nearly 70% of the population in Burundi, a country in East Africa with one of the continent’s lowest electrification rates. The company plans to connect 9 million people across peri-urban and rural areas over a seven-year period, addressing the limited access to electricity in both residential and business sectors.
The initiative was announced at the Africa Climate Summit in Nairobi and is the result of a multi-year development partnership between Virunga Power (a Gridworks investee company) and the Government of Burundi.
Currently, only 12% of Burundi’s 12 million people have access to electricity, with rural areas having a mere 2% electrification rate.
The project will receive financing from various partners, including Global Energy Alliance for People and Planet (GEAPP) and the US government’s Power Africa initiative.
Financing and Infrastructure Build-Out:
Gridworks, owned by British International Investment, became a controlling shareholder of Virunga Power in March 2023 following a $50 million investment. Virunga Power is leading the Weza Power project and will provide the initial equity investment.
The project aims to raise approximately $1.4 billion over seven years to establish a distribution infrastructure network connecting two-thirds of Burundi without the government needing to secure additional loans.
The utility will be connected to Burundi’s existing transmission network operated by REGIDESO, the state-owned utility company, which will continue to generate power from run-of-river hydropower and supply distribution-level power to urban areas.
Funding for the grid expansion and the creation of the new utility operator will come from a blend of private and public sources, including equity and debt, concessional funding, multilateral donor support, and private grants.
Weza Power is the first new private-sector electricity distribution company operating at a national level in sub-Saharan Africa in a decade.
The project represents a public-private partnership (PPP) that will mobilize an initial $60 million investment into the utility, aiming to provide grid electricity access to approximately 300,000 Burundians during the first two years.
Brian Kelly, CEO of Virunga Power, stated, “The expansion of power distribution networks to reach unconnected populations with affordable grid power can be achieved by blending public, multilateral, and private sources of capital when paired with efficient private-sector-led operations. While this is a common approach in developing and developed markets globally, Africa has lacked a locally-based model to follow, and Burundi’s willingness to take leadership with this approach is impressive and commendable.”