Douala, Cameroon, January 11, 2012
- IFC, a member of the World Bank Group is investing €60 million in direct financing, and coordinating €138 million in syndicated and parallel loans to the Kribi Power Development Company to support the development, construction and operation of a new natural gas-fired power plant and transmission line that will enhance the supply of reliable electricity and improve energy security in Cameroon.
The Kribi power project, consisting of a 216 megawatt natural gas-fired power plant and a 100 kilometer 225 kilovolt double circuit transmission line, will be implemented as a public-private partnership between the Government of Cameroon and the AES Corporation (USA), which own 44 and 56 percent of the company respectively. The plant will run on natural gas supplied from the offshore Sanaga South gas field – marking the first commercial development of Cameroon’s substantial gas reserves that have the potential to compensate for the country’s declining oil supplies and complement the development of its vast hydropower resources.
In addition to providing €60 million in direct financing to this €263 million project, IFC is coordinating additional parallel and syndicated loans from development finance institutions, including the African Development Bank (AfDB), the Netherlands Development Finance Company (FMO), the French Promotion and Investment Company for Economic Cooperation (PROPARCO), and the Central African Development Bank (BDEAC). The European Investment Bank is expected to finalize its financing to the project shortly. These institutions will provide an additional €138 million of the project debt through syndicated and parallel loans.
Jean David Bile, CEO of AES Africa said, “The development of Kribi will help meet the growing domestic demand for electricity and contribute directly to the development of Cameroon’s electric power infrastructure. We appreciate the support of institutions that share our commitment to responding to Cameroon’s critical infrastructure needs.”
IFC and the International Development Association (IDA) have closely collaborated in the preparation of the project, with IDA providing a Partial Risk Guarantee to facilitate Cameroon’s first long-term, local currency loan for infrastructure. A local bank syndicate, led by Standard Chartered Bank, will be providing the equivalent of €60 million to the project.
“The close collaboration between IFC and IDA was essential to securing the financing for Kribi, which is expected to benefit a large number of Cameroonians,” said Greg Binkert, World Bank Country Director for Cameroon. “As a result of the innovative local currency IDA-guarantee, the project will also help to deepen the domestic financial sector."
Thierry Tanoh, IFC Vice President for Sub-Saharan Africa, Latin America and Western Europe, said, “IFC has a long-standing commitment to Cameroon’s power sector, first as an advisor to the government in the privatization of the country’s integrated electric utility, and subsequently as a lead lender in two power transactions. As one of the few independent power projects in Africa, Kribi will serve as an example of public-private partnerships in the region.” Kribi is the second independent power project in Cameroon.
The World Bank estimates that power shortages currently cost the economy 2 percent of GDP growth and 5 percent in lost enterprise revenues. Increasing power generation capacity, efficiency and sustainability is at the heart of the Government of Cameroon’s Vision 2035 and Growth and Employment Strategy to transform Cameroon into an industrialized emerging economy.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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