TotalEnergies has finalized an agreement with Scatec, a Norwegian renewable energy company, to acquire 100% of its subsidiary SN Power, which focuses on renewable hydropower projects in Africa. This acquisition involves a joint venture where Scatec holds a 51% interest in SN Power, in partnership with Norfund and British International Investment (BII).
As a result of this deal, which is subject to specific conditions, TotalEnergies will obtain a 28.3% stake in the Bujagali hydropower plant in Uganda. Additionally, TotalEnergies will gain minority interests in two hydropower projects that are currently being developed in Rwanda and Malawi.
Bujagali Hydroelectric Power Station is a significant infrastructure project located on the Victoria Nile in Uganda, specifically at the Bujagali Falls. This power station plays a crucial role in Uganda’s energy landscape, producing approximately 25% of the country’s electricity needs.
Construction of the Bujagali Power Station commenced in 2007 and was officially completed in 2012. The plant was inaugurated on October 8, 2012, by Ugandan President Yoweri Museveni and Aga Khan IV, marking a pivotal moment in Uganda’s efforts to enhance its energy capacity. The first turbine began generating power in February 2012, and by June 2012, all five turbines were operational, bringing the total capacity to 250 megawatts.
The total cost of the Bujagali project was estimated at around $800 million, with additional expenses for a high-voltage transmission line amounting to $62 million. Funding for the project came from a mix of private investments and loans from various international financial institutions. Bujagali Energy Limited (BEL), the company responsible for the project, invested approximately $190 million of its funds. The remaining financing was sourced from several international lenders, including the International Finance Corporation (IFC), African Development Bank, European Investment Bank, German Investment Corporation (KfW), French Development Agency, and various commercial banks like Standard Chartered and BNP Paribas.
Bujagali Power Station is pivotal in addressing Uganda’s energy deficit, which was a significant barrier to economic growth. At the time of its planning, Uganda faced a daily power shortage of about 80 megawatts. The plant’s output significantly alleviated this issue, contributing to a more stable energy supply for both residential and industrial consumers. The electricity generated from Bujagali is sold at approximately $0.11 per kilowatt-hour, although efforts have been made to reduce this cost through refinancing and tax incentives.
Former Marsh Uganda Chief Executive, Alexander Mukasa, Replaces Gary Corbit as SanlamAllianz Life Insurance HeadThe project was not without controversy. There were significant environmental concerns regarding the dam’s impact on local biodiversity and the displacement of communities. Approximately 600 residents were resettled due to the construction of the dam. The project underwent extensive environmental and social assessments to address these issues, and measures were implemented to mitigate adverse effects on the environment and local communities.
In line with its goal of achieving net zero emissions by 2050, TotalEnergies is developing a competitive portfolio that integrates renewable energy sources, including solar and both onshore and offshore wind, alongside flexible assets such as combined cycle gas turbines (CCGT) and energy storage solutions. By the end of 2023, the company had installed a gross renewable electricity generation capacity of 22 GW. TotalEnergies plans to further expand this capacity to 35 GW by 2025 and aims to exceed 100 TWh of net electricity production by 2030.
“This acquisition of renewable hydroelectric assets and projects in Africa reflects our desire to contribute to the continent’s energy transition by bringing electricity to the people of African countries. In particular, we are delighted to be able to become a player in hydropower in Uganda, a country where we are also developing a major oil project. This is another example of TotalEnergies’ ability to implement its multi-energy strategy in oil-producing countries to support them in their energy transition,” said Patrick Pouyanné, Chairman and CEO of TotalEnergies.
“We are pleased to announce today’s transaction, as we believe TotalEnergies will be a strong asset owner going forward, with the ability to further develop the projects and contribute to the energy transition in Africa. We would like to thank the entire hydropower team for their hard work and dedication over the years, you have made a significant impact. In addition, our gratitude goes to our joint venture partners, host governments, and lenders for the support since 2020,” said Terje Pilskog, CEO of Scatec.
