African infrastructure investment platform Africa50 has joined forces with Senelec, Senegal’s electricity provider, to back the development of a 120MW combined cycle thermal power plant.
The pair will oversee the construction and operation of the plant while also looking to secure finance through the “competitive selection of a strategic sponsor” under a build, own, operate and transfer model.
The project is set to run on fuel oil from the outset, although Africa50 said it plans to replace this with natural gas from recently discovered fields once readily available. Set to be one of the largest power plants in the country, it benefits from a 20-year power purchase agreement, which Africa50 chief executive Alain Ebobissé said will help ensure a reasonable return for potential investors.
“This is a model of co-operation between the public and private sectors which, we are convinced, will permit the efficient development of priority projects everywhere in Africa,” he added.
The fund’s agreement with Senelec was unveiled at its second annual shareholders’ meeting, since its launch in 2015, where it also revealed the addition of Guinea and the Democratic Republic of Congo as shareholders of the vehicle. It has raised about $830 million from 23 African countries and intends to garner further commitments from institutional investors to meet its “medium-term target” of $3 billion.
Earlier this month, Africa50 entered into a joint-development agreement with Norwegian developer Scatec Solar and Norfund to help bring to financial close solar projects in Egypt with a capacity of about 400MW, as part of the country’s second round of feed-in tariff sites. Africa50 and Scatec Solar previously teamed up for a 100MW solar plant in Nigeria last year.