On Friday, the West African country of Mali signed an agreement with independent power producer Scatec Solar to build, own and operate the region’s first utility-scale solar power plant.
The agreement, signed with Electricité du Mali (EDM), the Malian electricity utility and the Ministry of Energy and Water, is for the development of a 33MW solar power plant.
The plant, which is developed in partnership with the World Bank’s IFC global infrastructure project development fund, InfraVentures, and local project development company, Africa Power 1, will be located near the city of Segou in South-East Mali, 240 km from Bamako.
Power purchase agreement
The agreement includes a Power Purchase Agreement (PPA) between EDM and Segou Solaire SA, the local project company controlled by Scatec Solar, for the delivery of solar power over the next 25 years.
The PPA with the utility includes a Concession Contract with the Government of Mali granting license to Segou Solaire to operate the plant.
Scatec Solar will own 50% of the power plant and IFC InfraVentures will hold 32.5%, while Africa Power 1 will hold 17.5%.
Scatec Solar is to construct the plant, and in addition provide operation and maintenance services after the plant is connected to the grid.
Mamadou Frankaly Keita, Minister of Energy and Water said of the agreement: “This landmark agreement signals the Government’s commitment to meet the nation’s growing energy demand and to provide clean, renewable and affordable energy to our people”.
Solar power finance
The project worth Euro 52 million ($58 million) is to be financed through 45% senior project finance debt.
IFC InfraVentures will arrange the debt for a total amount of Euro 23 million ($25.6 million).
In addition, the project has already been granted a concessional loan that will cover 30% of the Capex from the World Bank’s Climate Investment Funds through the programme ‘Scaling up Renewable Energy in Low Income Countries Programme’.
The remaining 25% is provided as equity by the project partners and financial close is expected before the end of this year.
Alain Ebobisse, Global Head of IFC InfraVentures explained that: “One of the pillars of the World Bank’s Country Assistance Strategy for Mali is to increase access to energy, a development fundamental. IFC InfraVentures’ partnership with Scatec Solar and Africa Power 1 helps advance this strategy through Scatec Segou, part of a series of renewable energy projects we are developing in the country.”
The ground-mounted photovoltaic (PV) solar power plant will deploy approximately 130,000 solar PV modules on a fixed tilt system and will connect to an existing transmission line.
The solar power generated from the plant will represent 5% of Mali’s total electricity consumption, equal to the electricity consumption of 60,000 households.
During the construction phase, the solar power project will provide 200 local jobs, whilst Scatec will put emphasis on transferring technical expertise to the local community.
Mali on the solar map
Once completed the Segou solar power plant is expected to reduce carbon emissions by about 46,000 tons. Scatec Solar and EDM will jointly register the project with the United Nations CDM (Clean Development Mechanism) under Scatec Solar’s programme for solar power projects in Africa.
Dr Ibrahim Togola, the chairman of Africa Power 1 SA and General Administrator of Scatec Solar West Africa said: “Today’s [signing] event is historic because Mali now becomes the first country to install the largest solar grid-connected power plant in the region. This high profile joint-venture in which Malian citizens participate will serve as a model to launch the solar era in West Africa.”
Main page featured image: Linde solar power plant. South Africa. Scatec Solar, Pic credits. APO