1 August 2012 – The board of directors of the African Development Bank (AfDB) group, through its private sector window, has approved a senior loan of €57.5 million to the Coder hydropower project for the design, construction and operation of two run-of-river hydro projects in Ngounie province and North Gabon.
The project consists of two run-of-river hydroelectric power plants, a 70 MW plant in the Ngounie province and a 52 MW plant in North Gabon. Despite a high electricity access rate of up to 83%, the Gabonese electricity sector still faces frequent electricity shortages and blackouts resulting from high urbanisation.
Gabon’s current power shortages hinder the country’s economic and social growth, making it a high governmental priority to revitalise the electricity supply and lower electricity prices. The government’s goal is to increase generation facilities from 373 MW to 1,200 MW by 2020. The current electricity production is split about 50:50 between hydro and diesel oil and Gabon also wants to cut environmentally unfriendly and costly diesel power generation.
The project, with a two-year completion target, will provide electricity to the national grid as well as provide security of supply to rural areas. The addition of 122 MW of hydro capacity will increase the country’s current national production capacity by about a third. It is also expected to help catalyse an additional 300 MW of hydro development in the next few years, out of Gabon’s total hydro potential of 5,000 MW.
As the first independent power project in a country with a transnational transmission line, Coder will strongly stimulate private sector development in Gabon and will create critical infrastructure to enable future regional inter-connections.
Neside Tas Anvaripour, head of infrastructure finance at the AfDB, says, "The project will deliver base-load energy at a highly competitive price, thereby helping Gabon diversify away from fossil fuels. The increased capacity will reduce blackouts and thus improve the efficiency and competitiveness of business activity in Gabon."
The project is in line with Gabon’s national power and development strategy, which emphasises infrastructure development. The Gabonese government will benefit from substantial increases in revenues directly and indirectly from the economic growth stimulated by the Coder project. The African Development Bank is not only a senior lender with this senior loan of €57.5 million, but also the arranger on the debt side from development finance institutions.