Washington D.C., May 19, 2005
— The Board of Executive Directors of the World Bank Group this week approved a comprehensive financing package in support of Senegal’s electricity sector that involves both the International Finance Corporation and the World Bank’s International Development Association. The financing consists of an IFC loan of up to Euro 17 million and an IDA partial risk guarantee of $7.2 million for the Kounoune I IPP project, as well as an IDA credit of $15.7 million to the Republic of Senegal.
The loan and partial risk guarantee will support the development, construction, and operation of the Kounoune I Independent Power Project, a 67.5 megawatt power generation plant to be located in Kounoune, near Dakar. This project will be a significant private investment in Senegal’s power sector, providing much-needed incremental generation capacity in a cost-effective way. The plant will sell power to Société Nationale d’Electricité du Sénégal (Senelec), Senegal’s electric utility, under a 15-year power purchase agreement.
The Kounoune I project is being developed under a build-own-operate scheme by MHI Equipment Europe B.V., a fully owned subsidiary of Mitsubishi Heavy Industries Ltd. of Japan, and Matelec S.A.L., the electrical equipment division of the Doumet group from Lebanon. Senelec selected the consortium in April 2004 through an international competitive bidding process.
Francisco Tourreilles, Director of IFC’s Infrastructure Department, said, “We are pleased to support the government’s efforts to consolidate reforms in Senegal’s power sector and to improve Senelec’s performance. The financing demonstrates that well-structured infrastructure projects in African countries committed to reform can attract private investment from experienced international sponsors. We look forward to completing this important project with MHI Equipment Europe and Matelec.”
“The support of the World Bank Group is important for this project,” said Samuel Sarr, CEO of Senelec. “It is our hope that the project will have a positive demonstration effect for future investments in Senegal’s electricity sector.”
Samer Nasr, CEO of Kounoune Power S.A., the project company, added, “We have greatly benefited from IFC and the World Bank’s experience in putting together a well-structured debt financing package for this project which will enable us to invest in Senegal’s power sector. .”
IFC is the private sector arm of the World Bank Group. Its mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in emerging economies, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
