Tembo Power and the International Finance Corporation (IFC) have entered into an agreement to collaborate on the development activities for two run-of-the-river hydropower projects: Dama (9.6 Megawatt) and Siku (12.4 Megawatt), located in the southern part of Burundi.
Tembo is the developer of the projects, and IFC will fund up to $1 million of development activities, subject to ongoing compliance with IFC Performance Standards, and look to provide the debt financing in the future.
Under the Collaboration Letter Agreement, funding to be provided by IFC will be used, among other activities, to support Tembo in carrying out several E&S studies, including an E&S Gap Analysis between existing E&S assessments (nationally approved ESIAs – 2022) for the Siku and Dama hydropower projects against IFC Performance Standards and World Bank General EHS Guidelines.
The nature of these hydropower projects may be complex and may give rise to various E&S impacts. These impacts and associated risks include but are not limited to: (i) environmental impacts over potentially critical habitat for both power projects, (ii) possible physically displacement for the Dama project, and temporary and permanent economic displacement of households related to both projects; and (iii) potential impacts to Indigenous Peoples (IP) communities for the Siku project.
Subject to the outcome of the E&S Gap Analysis, IFC will support Tembo in building E&S management capacity and in undertaking all necessary E&S studies, including: (i) an analysis of alternatives; (ii) improved scoping of social issues, including quantitative estimates of physical and economic displacement and legacy issues; (iii) a biodiversity study; (iv) possible link to IP communities for the Siku project in a 5km radius; and (v) a review of environmental flows determination
Access to electricity in Burundi is among the lowest in Sub Saharan Africa, and the country has one of the lowest GDP per capita in the world. The two power plants will contribute to meeting electricity demand and attract foreign direct investment. Through this collaboration, IFC will work closely with Tembo, support Environmental and Social (E&S) activities, review bankability considerations, and carry out due diligence activities on other workstreams.