AfDB Approves US$ 18.7 Million for Electricity Project in Guinea

30/10/2008
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Tunis, 29 October 2008 – The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (AfDB) Group, on Wednesday in Tunis approved a 12 million Units of Account (UA*) grant, equivalent to US$ 18.7 million, to finance an electricity project in Conakry, Guinea.

The goal of the Conakry Electrical Networks Rehabilitation and Extension Project (PREREC) is to improve the living conditions of the population through equitable access to electricity services. The project will help to improve the availability, reliability, efficiency and quality of the electricity service in Conakry, and will contribute to the improvement of the environment.

The project involves the development of distribution facilities, capacity building and project management. It will be implemented over a three-year period, starting from 2009. It is located in two council areas ("communes") in Conakry (Ratoma and Matoto) which account for about 70% of the 1.66 million inhabitants of the city of Conakry. The council areas have a high population density, and are the core of Conakry’s socioeconomic activity.

The project falls within the framework of the second strategic thrust of the second phase of the country’s Poverty Reduction Strategy (PRSP II) which seeks to increase the rate of access by the population to electric power from 16.4% in 2005 to 65% in 2015.

The low level of facilities in the electricity sector makes it impossible to satisfy the demand for electric power, which is increasing by 7% annually. Furthermore, the average rate of access to electricity at the national level stands at between 12% and 17% according to various estimates. This low level of service is due to the following factors: low electricity generation by the Electricity corporation of Guinea (EDG) which met less than 35% of demand in 2006; the acute deterioration of electricity generation, transmission and distribution facilities; inadequate investment in the electricity sub-sector; significant financial imbalance and commercial inefficiency of EDG; and a weak institutional framework for management of the energy sector. This leads to frequent load shedding, which is very detrimental to the country’s socioeconomic development.

The group of beneficiaries in the project area comprises 132,000 households and more than 2500 economic operators (including 1,200 microentreprises) engaged mainly in retail trading, handicraft workshops and related activities.

The project is consistent with the Bank’s intervention strategy in Guinea as defined in pillar 2 of the 2005- 2009 Results Based Country Strategy Paper which provides for the "strengthening of basic infrastructures and growth oriented sectors". Thus, the project will, through the rehabilitation and development of electric power facilities, help to make electricity available to SMEs /SMIs, households and social services (health, water supply, schools, etc.), thus supporting economic development and poverty reduction.

The total project cost is estimated at UA 19.24 million. The ADF grant will finance 62.4 % of the project. The remaining UA7.24 million will be provided from a loan from the Islamic Development Bank (IsDB).

The Bank Group started operations in Guinea in 1974. To date, the Group’s cumulative commitment in the country stands at 1.25 billion US$ million for 44 operations.

1 UA = US$ 1.55722 at 29-10-2008


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Yvan Cliche Phone: +216 71 10 23 87