15 August 2015, Dakar — The Republic of Senegal and Senelec (Société National d’Éléctricité du Sénégal) signed a guarantee today for the Tobene Power Project with the World Bank Group’s International Development Association (IDA), Tobene Power S.A., Citibank and BNP Paribas.
Tobene Power S.A is an independent power producer (IPP) set up to develop, own, build and operate a 96 megawatt high efficiency heavy fuel oil power plant in Taiba Ndiaye, approximately 90 km northeast of the capital, Dakar. The IPP is owned by Melec PowerGen, an affiliate of the Matelec Group. The power plant has the capacity to be converted to operate on natural gas, and will provide affordable and reliable power to Senelec, in turn supporting Senegal’s electricity demand growth.
The World Bank’s IDA guarantee will provide a mechanism to enhance credit for Senelec’s payments to the project company. It will also be instrumental in attracting private capital funding to the Tobene Power Project. Currently under construction, the power plant is expected to begin commercial operation in early 2016.
“Energy is a key sector for the country’s economic development,” said Louise Cord, Country Director for Senegal. “This guarantee will support Senegal’s efforts to secure continuous and reliable electricity production, and contribute to meeting the goals of the Senegal Emergence Plan.”
The IDA guarantee complements the International Finance Corporation’s (IFC) 90 million euro debt financing package to Tobene Power S.A. The IFC-arranged financing includes a 28.5 million euro loan for IFC’s account, completed by syndicated loans from the UK-based Emerging Africa Infrastructure Fund (EAIF), the Netherlands Development Finance Company (FMO) and the West African Development Bank (BOAD).
“This project has benefited from the strong support of the private sector and international financial institutions (IFI), including during the conception phase, which was supported by a IFC Infraventures venture capital fund,” explains Bertrand de la Borde, Manager for Infrastructure in Africa at the IFC. “The rapid roll out of this project is the result of a strong commitment by developers, various private and public sector partners, and the quality of their cooperation. This project will enhance the attractiveness of Senegal vis-à-vis private investors and local and international banks.”
The project is part of several World Bank Group initiatives in the sector, such as the Energy Sector Support Project, the Sustainable and Participatory Energy Management (PROGEDE), and the Sustainable Energy for All initiative. The World Bank Group is also engaged with the Government of Senegal and other technical and financial partners in the development of an independent solar energy production project with a capacity of 50 to 100 MW, a component of the Scaling Up Solar program.
About the World Bank Group
The World Bank Group plays a key role in the global effort to end extreme poverty and boost shared prosperity. It consists of five institutions: the World Bank, including the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA); and the International Center for Settlement of Investment Disputes (ICSID). Working together in more than 100 countries, these institutions provide financing, and other solutions that enable countries to address the most urgent challenges of development.