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

This case study examines the financial structure of the 250MW Bujagali Hydropower Project in Uganda to analyze how risk mitigation instruments from public financial institutions, specifically the World Bank Group, can mobilize private capital for low-carbon infrastructure in high-risk environments.

• The 250MW Bujagali Hydropower Project in Uganda successfully mobilized 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 Bujagali Hydropower Project is a rare example of a large project finance structure that simultaneously utilized two different risk mitigation instruments from the World Bank Group: political risk insurance (PRI) from the Multilateral Investment Guarantee Agency (MIGA) and a partial risk guarantee (PRG) from the International Development Association (IDA).
• The project faced significant challenges and controversy, including a failed first attempt due to bribery allegations and issues with social, economic, and environmental impacts. The second attempt also faced criticism regarding resettlement, environmental impacts, and power costs, leading to DFI investigations and subsequent project improvements.

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} }