IFC and Canada Ensure Financial Close of 35MW Hydro Project in Gabon

  • To scale up clean energy production capacity in Gabon, IFC, the Government of Gabon, Meridiam Infrastructure Africa Fund FIPS (MIAF), Meridiam Infrastructure Africa Parallel Fund FIPS (MIAPF) and the Fonds Gabonais d’Investissements Strategiques (FGIS), with the support of the Government of Canada, today announced a financing package for the Kinguele Aval hydropower plant, the first Independent Power Producer (IPP) in Gabon.
  • Construction of the plant is expected to start in the third quarter of 2021 and will be completed in 40 months.

The 35 MW hydropower plant, sponsored by Meridiam and FGIS, will bring low-cost, clean power generation capacity to Gabon’s capital Libreville. IFC expects the project to generate 203 GWh of electricity, amounting to approximately 13 percent of the Estuaire’s Province (or nine percent of the country’s) current total output, enough to serve 32,000 customers and saving more than 90,000 tons of CO2 emissions per year.

The site of the dam and its reservoir is located on the River Mbé across both the buffer zone and the heartland of the Monts de Cristal National Park, downstream of two existing hydro power installations, Kinguélé and Tchimbélé, operated by Gabon’s energy utility, SEEG.

Gabon has suffered from underinvestment in the power sector, especially in generation. The Kinguele Aval hydropower plant underscores Gabon’s efforts in energy transition by displacing expensive & polluting thermal power and demonstrating a commercially viable and sustainable way of developing the country’s under-exploited hydro potential.

The total project cost is estimated at EUR 178 million. To support the project, IFC is lending up to EUR 33 million from its own account and providing a concessional senior loan of up to US$25 million (or up to EUR 20 million) from the Canada-IFC Renewable Energy Program for Africa.

IFC has also mobilized an additional EUR 98 million financing through the African Development Bank (AfDB), Emerging Africa Infrastructure Fund (EAIF) and the Development Bank of Southern Africa (DBSA). In addition, IFC’s sister organization, the Multilateral Investment Guarantee Agency (MIGA), is expected to provide guarantees in favor of Meridiam. IFC will also provide interest rate and cross currency swaps required for the financing.

The construction of Kinguele Aval hydropower plant is expected to start in the third quarter of 2021 and will be completed in 40 months.

Author: Bryan Groenendaal

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