The IFC, a World Bank subsidiary, commits $27 million in support of the development of a 57MW heavy oil fuel-fired power plant that will be located outside Freetown.On Monday, the International Finance Corporation (IFC), made this announcement, adding that it also acted as the lead arranger and interest rate swap provider to mobilise a further $109 million in long-term financing from other development finance institutions.
Other finance institutions include the African Development Bank, CDC Group plc (the United Kingdom’s development finance institution), Emerging Africa Infrastructure Fund, and FMO (the Dutch development bank).
According to a company statement, the debt financing package will support an independent power generation facility in an industrial zone about 4km outside of Freetown, the capital of Sierra Leone.
IPP power generation
The project encompasses the development, construction and operation of a 57MW heavy oil fuel-fired power plant.
Electricity generated by the facility will be sold to the national off-taker EDSA under a 20-year power purchase agreement.
The power project is being sponsored by CDC Group and an Abu Dhabi energy company, TCQ Power Limited.
Karim Nasser of TCQ Power commented: “Five years ago we set out on the incredibly challenging task of developing the first IPP in this post-conflict African nation. With the support of IFC and other lenders we move ever closer to realising that objective and paving the way for further independent power generation in Sierra Leone.”
“IFC has been a leader in structuring a commercially viable project and helping us mobilise support from other lenders,” Nasser said.
IFC commits to revitalising the power sector
According to the IFC, the successful implementation of the project will rely on sustained commitment to broader reforms aimed at revitalising the power sector.
These reforms are being supported across the World Bank Group, the company stated, adding: “Power sector reform is being supported across the World Bank Group through products to reduce exposure to real investment risks (including operational and off-taker risks) that can make private investment financially viable.”
IFC director for West and Central Africa, Vera Songwe, said: “Private sector investors require tailored solutions to make large, long-term power sector investments in Sierra Leone, where less than 15% of the population has access to electricity.
“IFC’s ability to leverage products and advice across the World Bank Group reduces risk and helps mobilise investment in countries where we are most needed and the policy environment is robust.”