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Cameroon - AfDB Approves Euro 26 Million Senior Loan to Dibamba Power Project

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Tunis, 28 April 2010 - The Board of Directors of the African Development Bank (AfDB) Group through its private sector window approved on Wednesday, 28 April 2010 in Tunis a senior loan of € 26 million to finance a power project at Dibamba in Cameroon.

The project involves building an 86-MW thermal power plant and switchyard at Dibamba, with a 2-km 90 kV transmission line to connect the plant to the Southern Interconnected Grid, which provides electricity to the most populated and industrialized areas of the country. It will contribute directly to the development of Cameroon’s electric power infrastructure, by providing additional capacity to support industrial expansion and meet growing demand, which currently runs at 6% per annum.

The project has strong incremental development outcomes, including:

  • Freeing up resources that would otherwise be needed for self-generation of electricity at a much higher cost, leading ultimately to improved competitiveness of Cameroonian firms;
  • The availability of a reliable power supply will contribute to improved delivery of social services, such as healthcare and water supply;
  • The availability of reliable and affordable electricity supply will support SME development, indirectly creating additional jobs;
  • Creation of nearly 500 direct employment in the project’s construction phase and about 40 full-time jobs during operation
  • Potential reduction of emissions from obsolete private diesel generators
  • Improved living standards for connected households.

As a thermal power plant, Dibamba will help to diversify electricity generation in Cameroon, which is  mainly hydropower-based and prone to the negative impacts of drought and climate change. Dibamba is the first private IPP in Cameroon in which a private international and reputable company has majority shares. The Bank support to the electricity sector in Cameroon will demonstrate the bankability of the Cameroonian power sector to commercial financiers.

Through its focus on building infrastructure the project will boost socioeconomic development,  improve the delivery of social services, including education and healthcare which, in turn, will lead to improved living conditions and reduce poverty levels in line with Cameroon’s national development priorities.

The project is also well aligned with the Bank Group Strategy, which recognizes infrastructure development as crucial to promoting a business-enabling environment, growing the economy, and reducing poverty. The project is also in line with the Bank’s private sector development strategy, which encourages development of infrastructure through PPPs.

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