MIGA to provide €164m guarantee for Cameroon hydropower plant

WCN Editorial Team 29 Jan 2019 AFRICA ENERGY & UTILITIES

The Multilateral Investment Guarantee Agency (MIGA) has announced that it is providing a guarantee of €164.5m to two investors - EDF International and STOA - in Nachtigal Hydropower Company, which is responsible for the development of a hydropower plant in Cameroon.

MIGA, a member of the World Bank Group, has provided Breach of Contract cover for up to 15 years to the two investors. The agency guarantees have been provided alongside payment and loan guarantees from the IBRD, and an investment, loan and risk management swaps by IFC.

Located on the Sanaga River, about 65km north-east of Yaounde, the 420MW hydropower plant will contribute an additional 30% of installed generation capacity in Cameroon in addition to the climate co-benefits.

The plant will generate enough electricity to power 453,000 homes, and help avoid 41 million tons of CO2 emissions over next 40 years.

Nachtigal Hydropower Company and the Republic of Cameroon will develop the power plant on build, own, operate and transfer basis under a 35-year concession agreement.

The power generated from the plant will be sold to Energy of Cameroon (ENEO), a privately-owned electricity distribution company, under a power purchase agreement.

Upon completion, the Nachtigal Hydropower Project will be connected to the Southern interconnected grid, which represents about 94% of the Central African country’s national electricity consumption.

MIGA EVP & CEO Keiko Honda said: “As a project in an IDA-eligible country, as well as one with significant climate change mitigation benefits, the Nachtigal Hydropower Project is a high priority for MIGA.

“Equally importantly, I am pleased this project has mechanisms to help address environmental and social concerns, which are of utmost importance to MIGA.”

STOA deputy CEO Marie-Laure Mazaud said: "The Nachtigal Dam provides a concrete response to the significant demand for electricity in Cameroon, and is a reference project for the development of similar hydro projects in Africa in the near term.

“We are pleased to collaborate with the Republic of Cameroon, EDF, IFC and Africa50 to provide sustainable and accessible energy for the Cameroonian population. The social economic impact of Nachtigal project will be huge in terms of local employment and economic growth."

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Image: MIGA to provide €164m guarantee for Cameroon hydropower plant. Photo: Courtesy of Multilateral Investment Guarantee Agency.

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