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AFC invests €174 million in Côte d’Ivoire’s hydropower project

24 Jan 2019, 04:38 pm
Financial Nigeria
AFC invests €174 million in Côte d’Ivoire’s hydropower project

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The AFC adopted an innovative financing strategy for the project, by using a bridge loan to shorten the project cycle and commence project construction.

Samaila Zubairu, President and CEO, Africa Finance Corporation

The Africa Finance Corporation (AFC), the leading infrastructure development finance institution on the continent, has announced the financial close for a bridge loan facility contracted by Ivoire Hydro Energy (IHE), an Ivoirian startup, for the construction of 44-megawatts Singrobo-Ahouaty Hydroelectric Power Project (SAHP).

For a country that currently generates 2,200 megawatts (MW) of electricity, SAHP is expected to increase Cote d’Ivoire’s overall power capacity as well as reduce generation costs due to the low operating cost of hydroelectric power. SAHP will also advance Cote d’Ivoire’s goal of becoming a leader in the field of renewable energy.

Total commitment by the AFC to the IHE is €174 million, comprising a majority equity investment of €24.4 million and a bridge loan facility of €149.6 million. The AFC adopted an innovative financing strategy for the project, by using a bridge loan to shorten the project cycle and commence project construction. The first disbursement of the bridge loan facility happened in December 2018.

“Since 2015, when the AFC began working with SAHP as a financer and co-developer, we have achieved many development milestones,” said Samaila Zubairu, AFC’s President and CEO. “We are proud to be a major investor and facilitator in the Singrobo-Ahouaty Hydropower Project because this new source of renewable power will be integral to Côte d’Ivoire’s economic growth and social development.”

The financing structure of SAHP was designed to shorten the development phase from about 10 years to fewer than five years. It is expected that this approach will accelerate the process of developing projects in Africa and enable more power projects to be carried out.

Zubairu also said the project is the AFC's first equity investment in a hydro independent power producer and its first power equity in a Francophone country. The project will also diversify AFC’s power portfolio.

The AFC stated that the bridge loan facility was arranged to kick-start construction while waiting for long-term lenders to secure their final credit approvals. African Development Bank (AfDB) is arranging the long-term debt financing, most of which has already secured approvals.

SAHP, according to the statement, will be built by Eiffage, a leading French civil engineering construction company, which was selected after an international competitive bidding process. The other shareholders of the IHE include Themis, a project development company, and IHE Holdings, a company incorporated by Ekolain Alain Etty, a local entrepreneur.

“Since I began working as an engineer in 1981, I have seen first-hand opportunities electrification brings to a country,” said Alain Etty, the major shareholder in IHE Holdings. “Today, however, it is not enough to have just power. We need cost-effective renewable and sustainable energy source so that development is inclusive and does not adversely affect the environment. The Singrobo-Ahouaty Hydropower Project achieves all of these objectives.”

In 2015, Alain Etty won the top prize at the second West Africa Forum for Clean Energy Financing (WAFCEF2) jointly organised by the AfDB, the ECOWAS Centre for Renewable Energy and Energy Efficiency and the Climate Technology Initiative – Private Financing Advisory Network.


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