Washington D.C., December 20, 2006.
The International Finance Corporation, the private sector arm of the World Bank Group, is joining with other development finance institutions in a major financing package to AES Sonel, Cameroon’s privatized electric utility. At 260 million euros, the package is one of the largest financings ever provided to a privatized utility in Sub-Saharan Africa.
This investment will help fund an ambitious post-privatization investment program to boost generating capacity and improve electricity services throughout Cameroon. AES Sonel expects to add an average of 50,000 connections per year over the next 15 years, reaching previously unserved parts of the country. Rehabilitating and upgrading the country’s generation, transmission, and distribution systems and improving safety and environmental standards are also critical components of the company’s investment program. Total costs are estimated at over 380 million euros. IFC’s investment reflects the significant potential that exists in the region for governments and the private sector to join efforts to develop critically needed infrastructure investments.
“IFC’s investment in AES Sonel is an important element in Cameroon’s strategy to develop a reliable and accessible electricity sector, which is critical for the country’s economic growth and development,” said Francisco Tourreilles, IFC’s Director of Infrastructure. “IFC and its co-investors have supported AES Sonel throughout the challenging post-privatization and financing process and are delighted to see the company now poised to become a success story of electricity privatization in Sub-Saharan Africa.”
IFC’s commitment of 70 million euros is the largest loan extended by the eight-member syndicate. Other lenders include the African Development Bank, the Central African Development Bank, DEG (Deutsche Investitions und Entwicklungsgesellschaft mbH), the Emerging Africa Infrastructure Fund, the European Investment Bank, FMO (the Netherlands Development Finance Company), and Proparco
Jean David Bilé, CEO of AES Sonel said, “We welcome the support of IFC and other developmental agencies as we implement this investment program. It will enable us to continue to improve our performance and modernize Cameroon’s electricity system.”
Thierry Tanoh, IFC’s Director for Sub-Saharan Africa, added, “This financing demonstrates our continued commitment to helping develop private infrastructure projects in Sub-Saharan Africa. We commend the government’s commitment to consolidating power sector reforms and improving performance, and we feel confident that the success of Cameroon’s privatization will have a positive demonstration effect across the region.”
“IFC’s leadership has been essential in putting together such a well-structured debt financing package for us,” remarked Naveed Manazir, AES Corporation’s Project Director for AES Sonel.
Between 1990 and 2006, IFC financed 568 investment projects in Africa, for a total of $4.5 billion. IFC invests in private businesses across sectors. Major sector in its committed portfolio include mining industries (28 percent), financial institutions (25 percent), infrastructure (16 percent), and manufacturing and services (16 percent).
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org.
