• Norfund exits three East African hydropower projects, selling its 50.1% stake in Klinchenberg BV to Savannah Energy.

• Savannah gains stakes in Bujagali, Mpatamanga and Ruzizi III, diversifying into renewables across five African markets.

• The deal reflects a wider trend of DFIs handing mature projects to private investors to scale Africa’s power generation.

Norfund, Norway’s state development finance institution, is selling its 50.1% stake in Klinchenberg BV to London-listed Savannah Energy for up to USD 65.4 million in cash, deferred and contingent payments. The transaction ends Norfund’s decade-long involvement in three East African hydropower projects and shifts ownership to a private UK operator.

Klinchenberg BV holds minority interests in three strategic schemes: Uganda’s 255 MW Bujagali plant, which delivers roughly a third of national electricity; Malawi’s 361 MW Mpatamanga project, under development with World Bank backing and expected to double hydro capacity; and the 206 MW Ruzizi III project, a regional facility spanning Rwanda, Burundi and the Democratic Republic of Congo.

On completion, Savannah will indirectly hold net economic interests of 13.6% in Bujagali, 12.3% in Mpatamanga and 9.8% in Ruzizi III. The acquisition is being financed through a USD 37.4 million club loan and internal funds. The effective date is set at 31 December 2024, with legal closing targeted for the first quarter of 2026, subject to approvals in Kampala, Lilongwe and Kigali.

For Norfund, the sale reflects its model of assuming early-stage risks, stabilizing assets and then recycling capital into new renewable ventures. The institution has already monetised several mature projects, freeing up hundreds of millions of dollars for redeployment, though no consolidated figure has been disclosed.

Savannah Energy, previously focused on upstream gas in Nigeria and Niger and operating a 300 MW thermal plant in Ghana, gains immediate exposure to long-life, US-dollar-denominated hydro cash flows while entering five new African power markets. Chief executive Andrew Knott described the deal as “the first of several transactions” in building a broader energy platform.

Host governments stand to benefit from the presence of a UK-listed private operator able to accelerate financial close for the two projects still under development. Multilateral lenders including the World Bank, IFC and British International Investment remain engaged in Mpatamanga and Ruzizi III, cushioning construction and political risks.

The transaction highlights a broader trend in African infrastructure: development agencies incubate complex projects and, once construction and regulatory risks are reduced, transfer them to commercial owners to attract private capital. With 600 million Africans still lacking electricity, such transitions are increasingly critical to mobilizing finance at scale. The challenge will be to combine rapid capacity expansion with affordability and resilience in the face of climate risks.

Idriss Linge