AFC to co-develop $120m hydro project

The African institution is teaming up with the Netherlands' FMO to fund a 44MW Ivoirian plant.

Nigeria-based Africa Finance Corporation (AFC) has signed a joint agreement with Ivoire Hydro Energy (IHE), an Ivoirian project company, to finance and develop the Singrobo hydro power plant in Côte d’Ivoire.

As part of its mandate, the institution will work with other developers to carry out technical, environmental and social assessment studies, finalise the power purchase agreement (PPA) and assist with selecting engineering and construction contractors.

Project development costs will be covered by AFC, together with Dutch development bank FMO, through the joint AFC-FMO Project Development Facility. The structure will in the first instance inject up to $3 million in the project and must commit an additional $3 million to bring it to financial close. Both partners will have the option to acquire more equity in the IHE as the scheme further advances.

“[The Singrobo project] not only provides the opportunity to apply AFC’s differentiated model of providing long-term infrastructure financing, value added infrastructure asset project development expertise and importantly deliver bankable projects, but also accelerate regional integration by bridging the power deficit in West Africa,” said Andrew Alli, AFC’s president and chief executive, in a statement.

The plant will operate under a 35-year take-or-pay PPA with Ci-Energies, a national power utility managed by the Ivoirian Ministry of Energy and Petroleum Products. The generated power will be channeled to the 225-kilovolt (kV) Taabo-Abidjan transmission line through a proposed 225kV, 4-kilometre transmission line from Singrobo.

The deal marks AFC’s third major involvement in Côte d’Ivoire, which is soon to become a member of the bank. Previous investments made by the organisation in the country include its participation in the €270 million financing package provided to build the Henri Konan Bedie Bridge and a €50 million loan facility put together to help expand the Port of Abidjan.