The World Bank has signed agreements to finance a new power plant in Senegal that will provide power to over 1.5 million of the country's residents.
The bank has agreed a €93.4 million finance arrangement from the International Finance Corporation (IFC) and a $40 million equivalent IDA partial risk guarantee project agreement to support the Tobene power plant, located 90 km northeast of Dakar.
The 96 MW heavy fuel oil-fired plant is being developed as an independent power project (IPP) on a build-own-operate basis by Melec PowerGen, part of Lebanon's Matelec Group. The early stage development of the 123 million euro heavy fuel oil-fired plant was led by IFC InfraVentures, IFC's infrastructure project development fund.
"The World Bank Group has laid the groundwork for us to make a long term investment in Senegal's power sector. We look forward to being a part of the country's continued economic growth as we work with our partners to complete the Tobene project," said Mr Sami Soughayar, CEO of Matelec.
"This financing is part of a suite of World Bank Group instruments supporting generation, transmission, distribution, and rural energy access in Senegal, which is anchored in a strong sector dialogue with the Senegalese Government," said Makhtar Diop, Vice President for the World Bank's Africa Region. "We are also assisting Senegal to integrate in the West African Power Pool so it can access other affordable energy sources, including gas from Mauritania and hydropower from Guinea."
The IFC-arranged financing includes a €28.5 million loan for IFC's account, a €25 million syndicated loan from the UK-based Emerging Africa Infrastructure Fund (EAIF), a €25 million syndicated loan from the Netherlands Development Finance Company (FMO) and a €14.9 million equivalent parallel CFA loan from the West African Development Bank (BOAD). IDA provided a $40 million partial risk guarantee for the Tobene project.
Melec will own at least 90 per cent of the plant while IFC will retain a 10 per cent stake in the project upon completion of a proposed equity investment.