- The Multi Investment Guarantee Agency (MIGA) has issued guarantees to French asset manager, Meridiam, for equity investments into Asonha Energie SA, which will build and operate the 35MW Kinguélé Aval Hydropower Plant in Gabon.
- The 20-year guarantees totaling US$28.7 million will provide protection from breach of contract, expropriation, transfer restriction and currency inconvertibility, and war and civil disturbance.
Gabon has a comparatively high national electrification rate of 93 percent with about 374,000 customers connected to its five regional interconnected networks. However, the country’s power generation capacity is under strain due to the growing population, increased urbanization, and industrial development.
Related news: Link to more news on the energy sector in Gabon HERE
Gabon has among the highest potential for hydropower in Africa and historically, electricity has been generated mostly by hydropower plants in the country. The government of Gabon (GoG) is taking steps to transition into sustainable energy sources and create a single national integrated grid using hydropower. GoG intends to rely on independent power producers (IPP) to exploit its largely untapped hydro potential.
The 35MW Kinguélé Aval Hydropower Plant is the first IPP undertaken in Gabon at a cost of Euro 179 million. It will bring low-cost clean power generation capacity to support electricity demand in Gabon’s capital, Libreville, and restore financial viability of Gabon’s power sector. Additionally, the Plant will supply around 32,000 new customers, increase GDP by US$40 million, and create an estimated 880 indirect and induced jobs.
Asonha Energie SA was created to develop the Kinguélé Aval Hydropower Project by way of a BOT concession for 30 years. The company is owned 60 percent by Meridiam SAS France (Meridiam) through its Meridiam Funds. The Fonds Gabonais d’Investissements Stratégiques (FGIS), Gabon’s sovereign wealth fund, owns 40 percent through its wholly owned subsidiary Gabon Power Company. FGIS was established in 2012 to assist Gabon in developing new industries to generate revenues other than oil related income.
MIGA’s support for this first IPP project is expected to send a positive signal to the market within the context of a broader World Bank Group engagement in the power sector in Gabon.
Author: Bryan Groenendaal