Cameroon’s Nachtigal Hydropower project receives US $188m boost
The Nachtigal Hydropower project in Cameroon has received US $188m from the World bank’s Multilateral Investment Guarantee Agency (MIGA) in guarantees from the IBRD, and an investment, loan and risk management swaps by IFC.
The Nachtigal Hydropower project is a 420MW hydropower plant located on the Sagana river, about 65km north-east of Yaounde. It is being developed on a build, own, operate and transfer basis under a 35-year concession agreement between the project company and the Republic of Cameroon, and a power purchase agreement exists between the company and Energy of Cameroon (ENEO), a privately-owned electricity distribution company.
Addressing environmental and social concerns
MIGA has also provided breach of contract cover for up to 15 years to French power developer and operator EDF International, as well as STOA, a French infrastructure investment vehicle that focuses primarily on Africa.
The Nachtigal Hydropower will be connected to the Southern interconnected grid, which represents about 94% of Cameroon’s national electricity consumption.It will be a great boost to the country’s energy as it will contribute an extra 30% of installed generation capacity in Cameroon together with significant climate co-benefits. The project will also sell power to ENEO at a rate of US $0.070, among the lowest tariffs for a hydropower plant.
“As a project in an IDA-eligible country, as well as one with significant climate change mitigation benefits, I am pleased this project has mechanisms to help address environmental and social concerns, which are of utmost importance to MIGA,” said MIGA Executive Vice President and Chief Operating Officer Keiko Honda.
As of 2015, total power generation in Cameroon reached 6,426 GWh, with a total installed capacity of 1,286 MW out of which hydropower accounts for about 60% of the total installed capacity. The country has the third largest hydropower development potential in Sub-Saharan Africa, and forecasts estimate that hydropower will represent about 75% of the energy mix by 2023.
Photo credit: Construction Review Online