SEFA grants US $1 million to develop a transformative hydropower project in Guinea-Bissau

30/09/2015
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The Sustainable Energy Fund for Africa (SEFA) approved on September 16 on the sidelines of the African Development Bank’s (AfDB) Energy Week a US $965,000 grant to support the preparation of turnkey run-of-river hydropower plant with an estimated electric capacity of 20 MW at Saltinho, Guinea-Bissau. The hydropower plant will be interconnected by a transmission line to Bissau and neighbouring countries within the framework of the regional energy programme by the “Organisation for the Development of the Gambia River” (called OMVG in French), co-financed by AfDB. This SEFA support falls under a wider partnership with United Nations Industrial Development Organization (UNIDO), Global Environment Facility (GEF) and ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), for renewable energy investments promotion in Guinea-Bissau, including the development of the hydropower project at Saltinho.

After the approval, Joao Duarte Cunha, SEFA Coordinator, said “SEFA grant support aims at attracting strong private partners/investors and enable the project to reach bankability and have a high demonstration effect in Guinea-Bissau and beyond as the first Independent Power Producer or Public-Private Partnership Project, the first large renewable energy project, and the first project finance deal in a transition country with Bank participation.” When completed, this regional project will boost the total installed capacity in the country, currently capped at 26 MW, lead to energy diversification and significantly decrease the average cost of production. Additionally, it will contribute to reducing the overdependence on expensive, imported diesel and heavy fuel oil, and improve the carbon footprint of the country.

Martin Lugmayr, UNIDO Sustainable Energy Expert, highlighted the excellent cooperation with the African Development Bank and underlined the importance of hydropower for the country as cost-effective alternative to conventional diesel generation.

The SEFA grant will finance the technical assistance that shall structure the project in order to attract private investors and also to contribute to its bankability. In particular, the grant will encompass a technical feasibility study together with an institutional and financial scheme for an Independent Power Producer or Public-Private Partnership arrangement.

The project will also, through the provision of clean and renewable energy, contribute to one of the SE4All objectives of doubling the share of renewable energy in the global energy mix by 2030.

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About SEFA: SEFA is a US $90-million multi-donor facility funded by the governments of Denmark, the United Kingdom and the United States and hosted by the Energy, Environment and Climate Change Department of the AfDB. It supports the sustainable energy agenda in Africa through: grants to facilitate the preparation of medium-scale renewable energy generation and energy efficiency projects; equity investments to bridge the financing gap for small- and medium-scale renewable energy generation projects; and support to the public sector to improve the enabling environment for private investments in sustainable energy.