In West Africa, the government of Senegal and its national electricity company, Senelec, signed a guarantee with the World Bank Group’s International Development Association (IDA), Tobene Power, Citibank and BNP Paribas, for the Tobene Power Project, on Friday.
Tobene Power is an independent power producer set up to develop, own, build and operate a 96MW high efficiency heavy fuel oil power plant in Taiba Ndiaye.
Currently under construction, the power plant is expected to begin commercial operation in early 2016.
The plant is situated approximately 90 km northeast of the capital, Dakar.
The IPP is owned by Melec PowerGen, an affiliate of the Matelec Group.
The heavy fuel power plant has the capacity to be converted to operate on natural gas, and will provide affordable and reliable power to Senelec. It will also support Senegal’s electricity demand growth.
Enabling Senelec and Senegal
The World Bank’s IDA guarantee will provide a mechanism to enhance credit for Senelec’s payments to the project company.
The guarantee will also be instrumental in attracting private capital funding to the Tobene Power Project.
Louise Cord, World Bank country director for Senegal said: “Energy is a key sector for the country’s economic development.
“This guarantee will support Senegal’s efforts to secure continuous and reliable electricity production, and contribute to meeting the goals of the Senegal Emergence Plan.”
The IDA guarantee complements the International Finance Corporation’s 90 million euro debt financing package to Tobene Power.
The IFC-arranged financing includes a 28.5 million euro loan for IFC’s account, completed by syndicated loans from the UK-based Emerging Africa Infrastructure Fund, the Netherlands Development Finance Company and the West African Development Bank.
Bertrand de la Borde, Manager for Infrastructure in Africa at the IFC, explained: “This project has benefited from the strong support of the private sector and international financial institutions, including during the conception phase, which was supported by a IFC Infraventures venture capital fund.
“The rapid roll out of this project is the result of a strong commitment by developers, various private and public sector partners, and the quality of their cooperation.”
“This project will enhance the attractiveness of Senegal vis-à-vis private investors and local and international banks.”
Senelec and Senegal benefit from programmes
The project is part of several World Bank Group initiatives in the sector, such as the Energy Sector Support Project, the Sustainable and Participatory Energy Management (PROGEDE) and the Sustainable Energy for All initiative.
The World Bank Group is also engaged with the Government of Senegal and other technical and financial partners in the development of an independent solar energy production project with a capacity of 50 to 100MW, a component of the Scaling Up Solar programme.