The Emerging Africa Infrastructure Fund (EAIF) has announced a €25m finance facility to Ivoire Hydro Energy (IHE), which will build a 44MW hydro electricity generation plant on the Bandama River near the village of Singrobo in Côte d’Ivoire.
The African Development Bank (AfDB) acted as the mandated lead arranger of the debt finance and will be a senior lender in its own right. In addition to AfDB and EAIF, the other lenders are the German international development agency, DEG and the Africa Finance Corporation (AFC).
Also read: Catalyst Fund invests into 10 startups
Furthermore, 25% of the project cost is funded by equity from the project’s shareholders, IHE Holding, the Africa Finance Corporation and DIPFA, a Denham Capital-owned international investment platform for power projects.
Paromita Chatterjee, Investment Director at Ninety One, the fund manager for EAIF, said: “The new facility at Singrobo will be Cote d’Ivoire’s first hydro-electric development by an independent power producer. We are excited that it delivers on three of PIDG’s strategic objectives: mobilising private capital, enabling economic development and contributing to increasing Africa’s stock of renewable energy infrastructure.”
EAIF’s long-term financing package enables IHE to achieve financial close for the project, catalysing the design, construction and operation of the power plant and associated infrastructure and boosting rural access to clean energy.
The new plant will be an essential strategic economic asset for Côte d’Ivoire, where electrification rates range from 88% in urban areas to as low as 31% in rural parts of the country.
By displacing expensive peak-time diesel production and reducing CO2 emissions by 124,000 tons per annum, the plant is also integral to the government’s efforts to achieve the UN’s Sustainable Development Goals on Climate Action (SDG 13) and on Affordable and Clean Energy (SDG 7).
The project site is located on the Bandama River, 23 km downstream of the existing Taabo Dam and upstream of the confluence of the Nzi River. It is 3.5 km from the Singrobo village in the province of Taabo and 148 km by road from Côte d’Ivoire’s capital city, Abidjan.
The construction of the plant – as well as 3km of access roads and a 4km 90 kV transmission line and substation to connect the hydropower plant to the existing Taabo-Agboville transmission line – will generate over 500 jobs.
Also read: Mexico targets more food exports to Africa
The Singrobo plant catalyses the Ivorian government’s strategic plan for the development of the electricity sector, which aims to increase the total installed capacity to 4.2 GW (from approximately 2.2 GW currently) by 2030 mainly through Public-Private Partnerships, reaffirming EAIF’s role as a pathfinder supporting the development of nascent renewable energy markets. A long-term power purchase agreement will see all of the energy produced by the Singrobo plant sold to Compagnie Ivoirienne d’Electricité, the operator of Côte d’Ivoire’s national grid. In addition to closing the rural energy access gap and strengthening economic productivity, the plant’s flexible operating model enhances grid resilience, meaning it may be called in to meet baseload and peak demand.
Neo Themis SARL is advising and acting for the shareholders in relation to finalising the project’s development and the financing agreements.
