Africa50, the pan-African infrastructure investment platform, has acquired 15 per cent of the equity stake in the Nachtigal Hydro Power Company (NHPC) which runs the Nachtigal hydropower project in Cameroon.
Under the terms of the agreement signed today in Yaoundé, Africa 50 purchased its stake from the Government of Cameroon, an Africa50 shareholder, helping free-up public funds for other pressing development needs.
The project entails the construction and operation of a 420 MW hydropower plant on the Sanaga river near Nachtigal Falls, 65 kilometers from Yaoundé, as well as a 50 kilometer transmission line to Nyom. It will be operated under a 35-year concession.
Following this transaction, the shareholding of NHPC is comprised of EDF (40%), IFC (20%), the Republic of Cameroon (15%), Africa50 (15%) and STOA (10%).
Considered as a national priority, Nachtigal is part of Cameroon’s development plan to enhance both the reliability of the energy sector and access to power.
The plant will produce an average of close to 3,000 GWh per annum, covering 30% of the country’s energy needs.
The power produced will be sold to the national utility company at a competitive price, thereby benefitting the Cameroonian consumers and boosting the economic and industrial development of the country.
The project will have a substantial development impact, creating up to 1,500 direct jobs during construction (65% locally sourced), and many permanent jobs upon completion in 2023.
The project’s total cost is projected to be €1.2 billion. Shareholders’ equity will fund 24% of the project while the rest will be funded through debt under a project finance structure.
The lender group coordinated by IFC includes 11 development finance institutions and 4 local commercial banks coordinated by Attijariwafa Bank.
Through its involvement in such projects, Africa50 acts as an additional bridge between the government and private sponsors, in order to reach financial close soon.
Louis Paul Motaze, Cameroon’s Minister of Finance said that the project was one of the foremost priorities of the government. He commended all partners for their collective efforts to reach this crucial milestone.
He reiterated his country’s commitment to support the implementation of the project in collaboration with Africa50 and all other partners.
Alain Ebobisse, CEO of Africa50, said: “Our investment in Nachtigal proves that it is possible to leverage private sector financing to bridge our continent’s massive infrastructure gap and allow scarce public resources to be allocated to other priority sectors. This investment in sustainable energy will reduce electricity costs and contribute to the competitiveness of Cameroon’s economy”.
Koffi Klousseh, Director of Project Development at Africa50, added that, “Nachtigal will be the largest hydropower plant in Africa that is primarily funded with private capital. It will have a strong demonstration effect under the government’s sector reform process, paving the way for similar projects in the future. It is also a good example of how Africa50 can leverage its relationship with its shareholders and its financial resources to help speed up projects”.
The final agreements for the construction of Nachtigal hydroelectric dam were signed on 8 November 2018 in Paris by EDF, IFC, a member of the World Bank and the Government of Cameroon.
Construction should start at the beginning of 2019 and it is expected to be commissioned by 2023.