A EUR20 million loan to help finance the construction of Senergy 2, a 20 megawatt (MW) photovoltaic solar power plant in Bokhol, northern Senegal, has been agreed by intermediate capital and mezzanine finance facility Green Africa Power (GAP).
Construction has already started on site and the plant, which will provide enough renewable electricity for some 160,000 people, is expected to be fully operational this year.
Senergy 2 will create an estimated 150 jobs during construction and 25 local jobs once the plant is operational, as well as reduce the country’s CO2 emissions by 22,320 tonnes per year.
GAP is a member of the Private Infrastructure Development Group and funded by the UK Department for International Development, the UK Department for Business, Energy & Industrial Strategy and the Norway Ministry of Foreign Affairs. GAP’s mission is to promote the development of private sector owned renewable power generation in sub-Saharan Africa. GAP is supported by investment adviser EISER Infrastructure Partners alongside Camco Clean Energy.
Senergy 2’s lead developer and sponsor GreenWish Partners is an investment company which specialises in renewable energy generation projects in sub-Saharan Africa.
GAP’s loan to Senergy 2 will enable construction to be completed and the plant to become fully operational. As the sole debt provider at this stage, GAP will reduce financial risk by allowing time for long term senior debt to be put in place.
The project will contribute 20MW towards the Government of Senegal’s commitment to substantially increase the installed power generation capacity of the country.
GAP chair Jim Cohen says: “Forty-five per cent of people in Senegal have no access to power and this is holding back economic development. Once operational, Senergy 2 will make an important contribution to Senegal’s capacity for growth. GAP is actively looking for similar projects, which will bring more power to Senegal and other sub-Saharan countries in need of renewable energy. Senergy 2 shows the market what can be done.”
GreenWish president Charlotte Aubin Kalaidjian says: “GAP’s focus supports GreenWish’s own goal to encourage affordable renewable energy projects throughout sub-Saharan Africa. The electricity generated by Senergy 2 will be both environmentally friendly and competitive, with a cost per kilowatt-hour 50 per cent below the current cost of the energy mix. GAP’s loan will mean construction can continue through to operation.”
EISER partner Vivian Nicoli says: “The Senergy 2 project is an important demonstration of GAP’s ability to enable viable investments in renewable energy projects in areas where the market would not otherwise support them. Capacity improvements are needed urgently in Senegal, but high up-front costs can make financing renewable projects difficult due to a lack of willing long-term capital. By providing a construction finance loan, GAP can act to alleviate this impasse. Once construction has completed and the sponsor has been able to secure senior debt financing, GAP’s funds can be released and re-invested in other much-needed infrastructure projects across sub-Saharan Africa.”
