Norway-based Scatec Solar and the Norwegian Investment Fund for Developing Countries (Norfund) have started construction on an 8.5MW solar photovoltaic (PV) solar park in Rwanda.

The two companies will be majority owners in the project, while Dutch project developer Gigawatt Global will hold a 20% share.

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The three parties involved in the project have closed on $23.7m in financing.

Located 60km from Kigali, the project is claimed to be first utility-scale solar plant in East Africa and expected to generate annual energy production of 16 million kWh. It is expected to enhance the country’s power generation capacity by approximately 8% andcontribute towards the government’s objective to increase the electricity generation capacity fivefold in Rwanda by 2017.

The electricity produced from the plant will be fed into the national grid under a 25-year power purchase agreement (PPA) with the Rwanda Energy, Water and Sanitation Authority (EWSA) that was signed in July 2013.

"The electricity produced from the plant will be fed into the national grid under a 25-year power purchase agreement."

FMO, the Dutch Development Bank, the Emerging Africa Infrastructure Fund (EAIF) and private equity firm Norfund will finance the capital investment for the project that is expected to begin commercial operations by July 2014.

Scatec Solar CEO Raymond Carlsen said that the 75MW Kalkbult solar park is currently the largest in Africa.

"Our objective has been to bring the experience gained in South Africa to other African nations, and we are pleased to team up with Norfund, FMO and EAIF and introduce large scale solar energy to eastern Africa," Carlsen said.

FMO CIO Linda Broekhuizen said, "FMO is very proud to have arranged the senior debt package for this true frontier transaction with such large development impact, which provides renewable energy to a country with urgent electricity needs."