Risk mitigation instruments for renewable energy in developing countries: a case study on hydropower in Africa

The case study analyzes the financial structure of the 250MW Bujagali Hydropower Project in Uganda, which raised nearly $300 million in commercial loans and private equity. It specifically investigates the simultaneous application of a partial risk guarantee (PRG) from the International Development Association (IDA) and political risk insurance (PRI) from the Multilateral Investment Guarantee Agency (MIGA) to reduce financing costs and attract private capital in a high-risk, low-income environment.

• The Bujagali Hydropower Project in Uganda successfully raised nearly $300 million in private equity and commercial loans, representing an unprecedented level of private finance for a low-income country and exceeding the private investment levels of comparable regional hydro-projects.
• The project is a rare example of a large-scale project finance structure that simultaneously utilized two different World Bank Group risk mitigation instruments: a partial risk guarantee (PRG) from the International Development Association (IDA) and political risk insurance (PRI) from the Multilateral Investment Guarantee Agency (MIGA).

APA

Climate Policy Initiative (2015). Risk mitigation instruments for renewable energy in developing countries: a case study on hydropower in Africa. https://www.climatepolicyinitiative.org/publication/risk-mitigation-instruments-for-renewable-energy-in-developing-countries-a-case-study-on-hydropower-in-africa/

Chicago

Climate Policy Initiative. Risk mitigation instruments for renewable energy in developing countries: a case study on hydropower in Africa. 2015. https://www.climatepolicyinitiative.org/publication/risk-mitigation-instruments-for-renewable-energy-in-developing-countries-a-case-study-on-hydropower-in-africa/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Risk mitigation instruments for renewable energy in developing countries: a case study on hydropower in Africa |date=16 July 2015 |url=https://www.climatepolicyinitiative.org/publication/risk-mitigation-instruments-for-renewable-energy-in-developing-countries-a-case-study-on-hydropower-in-africa/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2015risk, author = {{Climate Policy Initiative}}, title = {{Risk mitigation instruments for renewable energy in developing countries: a case study on hydropower in Africa}}, institution = {Climate Policy Initiative}, year = {2015}, month = jul, url = {https://www.climatepolicyinitiative.org/publication/risk-mitigation-instruments-for-renewable-energy-in-developing-countries-a-case-study-on-hydropower-in-africa/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }