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IFC arranges $109 million to support power project in Sierra Leone

25 Oct 2016, 06:27 pm
Financial Nigeria
IFC arranges $109 million to support power project in Sierra Leone

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- The debt financing package will fund the development, construction, and operation of the 57 megawatt heavy-oil fuel-fired power plant located in an industrial zone near Freetown.

A power transmission network

The International Finance Corporation said today that it acted as lead arranger for a $109 million long-term financing to support an independent power generation facility in Sierra Leone.

The Washington D.C.-based multilateral lender said the debt financing package will fund the development, construction, and operation of the 57 megawatt heavy-oil fuel-fired power plant located in an industrial zone about four kilometres outside of Freetown – Sierra Leone’s capital city. The electricity generated by the facility will be sold to the national power utility company – Electricity Distribution and Supply Authority (EDSA) – under a 20-year power purchase agreement, the IFC said.

“Private sector investors require tailored solutions to make large, long-term power sector investments in Sierra Leone, where less than 15 percent of the population has access to electricity,” said Vera Songwe, IFC’s Director for West and Central Africa. “IFC’s ability to leverage products and advice across the World Bank Group reduces risk and helps mobilize investment in countries where we are most needed and the policy environment is robust.”

The IFC said it committed $27 million of its own funds to the deal and raised the remainder from development finance institutions, including the African Development Bank, CDC Group (the United Kingdom’s development finance institution), Emerging Africa Infrastructure Fund, and FMO (the Dutch development bank).

Sierra Leone’s power sector suffers from decades of underinvestment in power generation, transmission, and distribution. Transmission losses are at 38 percent – which is among the highest in Africa. Grid connection rates are low, and there is regular load shedding and a non-cost recovery tariff scheme, according to the IFC.

“Five years ago we set out on the incredibly challenging task of developing the first IPP in this post-conflict African nation,” said Karim Nasser of Abu Dhabi-based TCQ Power Limited, one of the project’s main sponsors. “With the support of IFC and other lenders we move ever closer to realizing that objective and paving the way for further independent power generation in Sierra Leone.”


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