Newsletter Subscription

In April 2023, President Évariste Ndayishimiye announced his vision for turning Burundi into an emerging market by 2040 and a developed nation by 2060. 

The country has a long journey to get there. Following decades of civil war and political upheaval, Burundi ranks among the poorest countries in the world, with per capita income of just US$246, according to the IMF.

Agriculture is the main pillar of the economy accounting for 40% of GDP and 90% of employment. The country’s chief exports are coffee and tea, along with gold. 

Its small industrial sector mainly consists of construction, agricultural processing, brewing and energy firms. 

Achieving the president’s ambitious vision will require a structural transformation of the entire economy. Before that can happen though, there are enormous infrastructure gaps that need to be addressed. 

Just 13% of Burundi’s 13 million population has access to electricity. In rural areas, the figure is even lower at 2%. Less than one third of those living in rural areas have access to safely managed water at home. Among the urban population, 48% live in slums or informal settlements. 

The 2040 vision document identifies Burundi’s natural energy resources - hydro, solar and wind - among the country’s key strengths, along with its abundant mineral reserves. It also cites regional integration as a major opportunity and says corridor infrastructure projects would help to open up the landlocked nation.

And it is in these areas that investment spending is largely being focused (as well as on strengthening the agricultural sector).

In early May, the official inauguration of Burundi's first grid-connected solar power plant took place at Mubuga in the central Gitega province, with President Ndayishimiye in attendance. The 7.5MW photovoltaic plant was developed by Gigawatt Global and is secured by a 25-year power purchase agreement. 

France's Voltalia carried out the engineering, procurement and construction services. Pan-African private equity investor Inspired Evolution and the UK government-funded Renewable Energy Performance Platform helped to finance the project, with the US’ International Development Finance Corporation providing political risk insurance. There are already plans to double the size of the plant.

The inauguration followed the launch in March of a US$17 million World Bank-funded off-grid solar programme to bring electricity to 65,000 rural households and clean cooking solutions to 300,000 households.

But it is the hydropower sector that is seeing the most project activity. 

Hydropower projects

In September 2022, China completed the construction of the 15MW Ruzibazi hydro facility and more than 100MW of other projects are currently being planned or under construction.

The biggest hydropower scheme underway is the simultaneous development of Jiji and Mulembwe plants in Bururi province, in the southeast of the country.

The World Bank, the European Investment Bank, the European Union and African Development Bank (AfDB) are funding the project, the total cost of which is estimated at US$270 million. The plants have a combined capacity of 48MW and are being built about 3.75km apart from each other. The project includes the construction of four new substations and the extension of three existing ones, and the installation of 132.6km of transmission lines and 40km of distribution lines.

The Jiji facility will have a capacity of 31.5MW, while the Mulembwe run-of-river plant will have a capacity of 16.5MW. 

The project has been more than a decade in the making, having been approved for World Bank funding in 2014. It has encountered multiple delays and cost overruns during construction and is now slated for completion in mid-2024. 

The contractors for the hydropower facilities are Egypt’s Orascom and Italy’s CMC, while the substation work is being carried out by French group VTTE-SDEL ELEXA, and India’s KEC International is installing the transmission lines. Austria’s ANDRITZ Hydro supplied the turbines and electro-mechnical equipment.

As of the end of May, the construction of the hydropower facilities was 60% complete, while the substations and transmission lines had reached 40% and 57% respectively.

Several other hydropower projects are also moving ahead. 

In June, Hydroneo East Africa invited expressions of interest for the contract to design and construct the 10MW Mpanda plant in Bubanza province and its 27km, 33kV evacuation line, following presidential approval of the long-planned public-private partnership (PPP). The deadline for submitting bids was 25 July.

The PPP contract had been signed nearly two years earlier, along with a power purchase agreement with public utility REGIDESO. The Mpanda project originally started out as a government-funded initiative, with construction beginning on earlier designs in 2011. However, works were halted at 20% completion in 2015 due to a funding shortfall. The project was subsequently handed over to the private sector to redesign as a run-of-river project under a 25-year build-own-operate-transfer concession. The estimated cost of the project is US$43.5 million.

Tembo Power of Mauritius is working on the development two further run-of-river plants in Burundi, with a combined capacity of 22MW. The 9.6MW Dama facility will be built in Rumonge province, while the 12.4MW Siku plant will be located in Bururi province. In August, the firm signed a collaboration agreement with the International Finance Corporation that could see it act as the mandated lead arranger for the US$60 million debt financing for the two plants. Financial close is expected in 2024.

Meanwhile, Virunga Power broke ground in May on the 1.65MW run-of-river Upper Ruvyironza project, which is expected to take 20 months to complete, and the much-delayed 20MW Kabu 16 plant funded by Exim Bank of India, has finally crossed 80% completion. Construction of the troubled project began in 2017. 

The slow pace of project development has become a key feature of the market, due to limited local capacity coupled with pandemic-induced delays.

Burundi is also set to gain 76MW of additional electricity capacity from two regional hydro projects being funded by multilateral development banks. 

It will receive 26MW from the Regional Rusumo Falls hydroelectric project, which is being developed under a tripartite agreement between the governments of Burundi, Rwanda, and Tanzania. 

The 80MW plant at Rusumo Falls on the Kagera River, on the border of Rwanda and Tanzania, is currently undergoing commissioning; the first turbine test run took place on 14 June. The transmission lines and substation components are already complete.

Burundi will also get 50MW from the Ruzizi III regional initiative. The 147MW hydropower plant is being developed on the Ruzizi River that flows along the borders of the Democratic Republic of Congo (DRC), Burundi, and Rwanda. Completion is slated for 2025. 

REGIDESO noted in August that with so much generation capacity coming online, Burundi could face a surplus of power in the medium term unless it makes urgent investments in distribution infrastructure. It said that installed capacity is expected to climb from 87.4MW in 2022 to 304.4MW in 2028.

Even so, much more capacity needs to be built to meet Burundi’s industrialisation aims. 

The National Development Plan 2018-27 states that Burundi will need at least 400MW for industrialisation purposes and 412MW for the mining sector by 2027, which would leave a deficit of more than 500MW. The government also hopes to achieve universal electricity access by 2030.

Other options being considered to raise electricity output include geothermal and nuclear energy. In July, Burundi signed a memorandum of understanding with Russia for the peaceful development of nuclear energy.

Beyond the power sector, Burundi is making headway with a series of transportation projects to support regional integration.

Railway plans

The biggest infrastructure project in the pipeline is the planned railway linking Tanzania and Burundi. The railway will open up access for Burundi to Tanzania’s Dar Es Salaam Port, reducing journey times and logistics costs for imports and exports, and supporting the expansion of the mining, manufacturing and agriculture industries.

The implementing authority for the project is Tanzania Railways Corporation. It invited contractors to prequalify for the design and build contract for the railway in April, with a 15 May deadline.

The project involves the construction of 282km of electrified standard gauge railway from Uvinza in Tanzania, across the international border along the Malagarasi River to Musongati and Gitega in Burundi.

The plan is to appoint a single works contractor and supervising consultant for the whole project, but it has been divided into two lots for administration purposes. Lot 1 covers the 156km Tanzania section, while Lot 2 covers the 126km Burundi section.

Lot 2 is further divided into two packages, with package A covering the 80km Malagarasi-Musongati section and package B covering the 46km Musongati-Gitega section.

Construction is expected to take five years to complete. The cost has been estimated at US$1.3 billion. The governments have applied to the AfDB for financing.

The plan is to extend the railway into the DRC. In March, the feasibility study and preliminary engineering design contract for the Gitega-Bujumbura-Uvira-Kindu section was awarded to South Africa’s Zutari. 

Road projects

As a landlocked nation, the integration of regional transport networks is a priority for Burundi and development banks have financed a number of road projects in recent years.

The AfDB has been supporting a cross-border road improvement project between Rwanda and Burundi, linking the two nations to the central and northern corridors which provide access to the seaports of Dar-es-Salaam and Mombasa. There are further plans for paving 65km of roads in Burundi including border connections to Rwanda, along with the construction of agricultural collection centres and a one-stop border post.

The Uvira-Bukavu Road rehabilitation project is also moving ahead. The road links Lake Tanganyika and Lake Kivu, connecting the DRC to Burundi and Tanzania. The plan is to develop the project as a PPP. In May, a market sounding for the US$500 million project was launched to potential investors, lenders and other stakeholders.

Various national road projects are also benefiting from development bank support, such as the Nyakararo-Mwaro-Gitega Road (RN18) upgrade and asphalting project which is due for completion this month having been delayed by the pandemic. The project was designed to open up access within the country, asphalting 24km of roads linking the towns of Nyakararo, Mwaro and Gitega; and the development of 15km of rural roads.

The World Bank is also supporting the rehabilitation of Port of Bujumbura-Gitaza RN3 road section, the construction of the Bujumbura bypass and fibre-optic cable installations.

Port and airport investments

The other two key infrastructure projects underway are the upgrades of the port and airport in Bujumbura.

China is supporting the modernisation and expansion of Melchior Ndadaye International Airport. The work involves rehabilitating runways and parking areas, a new control tower and administration building, and supplying equipment for air traffic control and meteorology. 

Meanwhile, construction of a US$1.8 million refrigerated terminal at the airport funded by the World Bank to facilitate exports of perishable 'Made in Burundi' products is nearing completion. 

Burundi’s Port of Bujumbura on Lake Tanganyika is being renovated through joint funding from the AfDB and the European Union.

The €79 million (US$86 million) project includes the rehabilitation of the south and north cargo quays and the north jetty, the construction of a new embankment and a passenger quay, dredging and excavation works, demolition works of the existing jetty, the fitting out of offices and developing access roads.

The renovation is expected to take two years to complete, and it forms part of a larger project to exploit the potential of Lake Tanganyika as a navigable inland waterway to promote connectivity between Burundi, the DRC, Zambia and Tanzania.

It might yet prove to be leap too far for Burundi to become an emerging market by 2040, but the country stands to gain much in trying. 

Positive outlook

In April, the IMF extended a US$261 million loan to Burundi - its first in eight years - to help the economy recover from the pandemic and the impact of the Ukraine war. The fund was upbeat in its outlook for Burundi.

It praised the authorities’ efforts to promote private sector development and improve living standards, and said growth is expected to be about 6% in 2024, after falling to 1.8% in 2022. Growth is forecast to stabilise around 5% over the long term, supported by investment in infrastructure projects. The IMF also noted that Burundi’s new mining code and rising local fertiliser production should unlock economic growth and lead to increased export volumes.

Top photo: Jiji dam construction (Source: Twitter/X @JijiMulembwe)