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Senegal: African Development Bank Group approves € 51.26 million loan for Malicounda Dual Fuel power plant
The Board of Directors of the African Development Bank Group has approved a €51.26 million senior loan to finance a 120MW dual-fuel combined cycle power plant in Malicounda, Senegal. The Bank, acting as Mandated Lead Arranger, will further mobilize additional resources from DFIs to meet the required debt portion of the transaction.
Located about 85km from Dakar, the project will help the Government of Senegal increase the base load needed to strengthen grid stability, and facilitate addition of more renewables into the grid. Renewables currently represent 13% of the national grid capacity in Senegal and need to be scaled up to increase sources of energy.
Reiterating the urgency to power Africa, Amadou Hott, the Bank’s Vice President for Power, Energy, Climate Change & Green Growth said that access to power was critical in delivering economic growth, improving livelihoods, powering industry and enhancing infrastructure development. “By increasing base load capacity, this project will contribute to Senegal’s progression towards sustainable development, while contributing to job creation during the project development and operation”, he said.
“Given the growing energy demand of 7-8% per year, coupled with the government’s ambition to transform its industry, this project will substantively reduce the government’s financial burden resulting from imported fossil fuels. It also comes just in time as the government prepares to fully transition to gas by 2025,” said Wale Shonibare, the Bank’s Director for Energy Financial Solutions, Policy & Regulation.
Besides the financial additionality, the Bank will also ensure that the project adheres to environmental and social laws and regulatory requirements of Senegal, as well as the Bank’s ISS and Operational Safeguards.
Aligned with the Bank’s New Deal on Energy for Africa, the project will increase availability and reliability of energy for the country, which is critical for socio-economic development. The project is also aligned with Senegal’s development priorities, and the Bank’s Country Strategy.
The Malicounda plant is expected to be commissioned in 2020.
Hawaly Agne, Investment Officer, PESR