The African Development Bank (AfDB) has reached an agreement with other financiers to avail nearly 200 million euros to finance a gas-powered electricity project in Cameroon, the Tunis-based sovereign lender said in a statement Friday.
AfDB is lending 39.5 million euros to the Kribi Power Project in Cameroon. The Kribi project will help Cameroon to meet its growing demand for power, particularly during peak periods, and further stimulate the country‘s economic development, the bank said.
The Bank, along with other finance institutions including the World Bank’s private-lending arm, the International Finance Corporation (IFC), the Netherlands Development Finance Company (FMO), the Development Bank of Central Africa (BDEAC), Proparco, have agreed on a syndication of local banks led by Standard Chartered Bank.
The banks signed on 22 December a loan agreement to provide a total of 198 million euros to the Kribi Power Development Company (KPDC), a subsidiary of the AES Corporation of the US.
The American power company trades in 27 countries worldwide, in partnership with the Government of Cameroon, which owns 44% of the joint venture.
The project comprises the construction and operation of a 216 megawatt gas-fired power plant located in the north of the coastal city of Kribi, in the southern province of Cameroon with a 100 km 225 kV transmission line to be connected to the country’s Southern Interconnected Grid.
“It will provide increased reliability of electricity supply and enhanced energy security in Cameroon,” the AfDB said in its statement.
Tas Neside Anvaripour, AfDB’s Infrastructure finance manager, said the lack of reliable electricity was a key obstacle to doing business in Cameroon.
“The Kribi project will increase access to reliable energy. The use of domestic gas will capitalize on the country’s own resource and substitute for fuel imports,” she said.
“We are pleased to work with local banks in responding to Cameroon’s critical infrastructure needs,” she added.
The Kribi project will diversify Cameroon’s energy production sources through gas generation expansion while displacing inefficient thermal power plants.
The new energy mix will reduce environmental impact, including carbon emissions. The project will support the expansion of the aluminum industry in Cameroon