AfDB, IFC, FMO Invest €66 Million in Dibamba Power Company in Cameroon
Tunis/Washington/The Hague, May 17, 2011 --- The African Development Bank (AfDB) Group, the Interntional Finance Corporation (IFC)-a member of the World Bank Group), and the Netherlands Development Finance Company (FMO), are investing €66 million in the Dibamba Power Development Company to help it build an 86-megawatt powerplant that will ensure reliable electricity supply and improve energy security in Cameroon.
The Dibamba Power Development Company is a subsidiary of the AES Corporation in which the government has 44 percent stake..
AfDB, IFC and FMO are each lending €22 million to the €92 million Dibamba project, a heavy fuel, oil-fired power plant located near Douala, Cameroon‘s industrial center. The plant will be connected to the Southern Interconnected Grid via a two-kilometer transmission line, also financed as part of the project.
“A reliable and affordable energy supply is critical to enhancing private sector development, growing the economy, and reducing poverty. By building new power infrastructure, the Dibamba plant addresses one of AfDB’s key objectives, which is to help improve the availability and reliability of electricity to industries and households,” said Neside Tas Anvaripour, Division Manager, Infrastructure and Private Public Partnerships, Private Sector Department, in the African Development Bank.
Andrew Vesey, AES Executive Vice President and President of the Latin America and Africa Region, said: “The expansion of Dibamba will help meet the growing domestic demand for electricity and contribute directly to the development of Cameroon’s electric power infrastructure. We are pleased to work with institutions that share our commitment to responding to Cameroon’s critical infrastructure needs.”
Bernard Sheahan, IFC Director for Infrastructure in Africa and Latin America, said, “As Cameroon‘s first IPP, the Dibamba project marks an important next step in the country’s development of its power sector and serves as an example of how privatization and sector reform can help attract private sector investment to the region.“
Dave Smit, FMO‘s Manager Structured Finance Energy, said, “The power supply from the Dibamba project contributes to diversifying Cameroon’s energy mix, improving overall reliability of electricity supply, and will boost the country’s energy net supply capacity by around 10 percent. FMO is very pleased to play a part in stimulating Cameroon‘s development in this way.“
The Dibamba plant has been developed to avoid imminent electricity shortages and avert an emergency power situation. It will help Cameroon meet its growing demand for power, particularly during peak periods, and provides a much-needed thermal component to a largely hydro based system, which is unreliable in years of poor rainfall.
The project will initially be oil-based, but an interest rate reduction has been structured into the design of the long-term debt to encourage the plant’s conversion to gas at a later stage.
The African Development Bank (AfDB) is a multilateral institution that promotes sustainable development in Africa. It is Africa’s premier development finance institution, engaged in mobilizing resources for the economic and social progress of its 53 African Regional Member Countries (RMCs).
The AfDB provides a range of financial products for the private sector to complement its traditional lending operations to governments. The Bank Group promotes strong social and corporate governance standards as well as help African Companies achieve international best practices, making them more competitive at home and in the international marketplace.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development.
The Netherlands Development Finance Company (FMO) is the international entrepreneurial bank of the Netherlands. FMO invests risk capital in companies and financial institutions in developing countries.
With an investment portfolio of EUR 5.3 billion, FMO is one of the largest bilateral private sector development banks worldwide. Thanks in part to its relationship with the Dutch government, FMO is able to take risks which commercial financiers are not - or not yet - prepared to take. FMO's mission: to create flourishing enterprises, this can serve as engines of sustainable growth in their countries.
Nicol Houra Onike
African Development Bank
Ph +216 7110 3227
Zibu Sibanda, IFC
In The Hague
Eveline Schijf, FMO
Ph: +31 70 314 9924