Development finance institution the International Finance Corporation (IFC) and various Canadian government organisations are providing a financing package for the 35 MW Kinguele Aval hydropower plant, in Gabon.
Meridiam Infrastructure Africa Fund FIPS, Meridiam Infrastructure Africa Parallel Fund FIPS and the Fonds Gabonais d’Investissements Strategiques (FGIS), with the support of the government of Canada, are providing funding for the project, which is the first independent power producer project in Gabon.
To support the project, the IFC is lending up to €33-million from its own account and providing a concessional senior loan of up to $25-million, or up to €20-million, from the Canada-IFC Renewable Energy Program for Africa. The total project cost is estimated at €178-million.
The IFC has also mobilised an additional €98-million financing through the African Development Bank, the Emerging Africa Infrastructure Fund and the Development Bank of Southern Africa.
In addition, IFC’s sister organisation, the Multilateral Investment Guarantee Agency, is expected to provide guarantees in favour of Meridiam.
The IFC will also provide interest rate and cross-currency swaps required for the financing.
Sponsored by Meridiam and FGIS, the plant will bring low-cost, clean power generation capacity to Gabon’s capital Libreville.
Construction is expected to start in the third quarter of this year and be completed in 40 months.
The IFC expects the project to generate 203 GWh of electricity, amounting to about 9% of the country’s current total output.
It is also expected to save more than 90 000 t/y of carbon dioxide emissions.
“The Kinguele Aval hydropower plant is a landmark project for Gabon that has benefited from an array of complementary services and instruments from the World Bank Group.
"By adding electricity supply that meets Gabon’s growing demand, the Kinguele Aval hydropower plant will increase economic productivity in Gabon and create hundreds of jobs to spur a green, inclusive and resilient growth,” says IFC Central Africa country manager Sylvain Kakou.
Gabon has suffered from underinvestment in the power sector, especially in generation. The Kinguele Aval hydropower plant underscores Gabon’s efforts in energy transition by displacing expensive and polluting thermal power and demonstrating a commercially viable and sustainable way of developing the country’s under-exploited hydro potential.