January 28 (Renewables Now) - The World Bank’s Multilateral Investment Guarantee Agency (MIGA) has provided guarantees of up to EUR 164.5 million (USD 187.4m) in guarantees for the construction of a 420-MW hydropower plant (HPP) in Cameroon.
MIGA announced the guarantees on Monday, saying they were provided alongside loan guarantees from the International Bank for Reconstruction and Development (IBRD), and investment, loan and risk management swaps by the International Finance Corp (IFC). The guarantees bring protection for up to 15 years against breach of contract and were issued to France’s EDF International and Africa-focused infrastructure investment vehicle STOA, both investors in the Nachtigal Hydropower Company.
The Nachtigal HPP will be installed on the Sanaga River, selling its output under a power purchase agreement (PPA) with local power distribution firm Company and Energy of Cameroon (ENEO) at EUR 0.061/kWh. The project is being developed on a build-own-operate-transfer (BOOT) basis under a 35-year concession agreement between project company Nachtigal Hydropower Company and the Republic of Cameroon.
According to the World Bank, the African country’s peak demand for electricity is expected to quadruple by 2035. As of 2015, its total power generation capacity was 1,286 MW, of which 60% was hydropower.
(EUR 1.0 = USD 1.140)