IFC Finances Private Sector Investment in Senegal’s Power Sector

Washington D.C., December 05, 2005 —Investment in Senegal’s electricity sector is moving forward, following the International Finance Corporation’s signing of agreements to provide financing to the Kounoune I independent power project. The project is a 67.5 megawatt diesel power generation plant to be located in Kounoune, east of Dakar, and will sell power to Société Nationale d’Electricité du Sénégal (Senelec), Senegal’s electric utility, under a 15-year power purchase agreement signed earlier this year. The project will improve reliability and generating capacity, which have been insufficient to meet demand and have hindered the country’s growth.

The Kounoune power project is being developed under a build-own-operate scheme by Matelec S.A.L., the electrical equipment division of Lebanon’s Doumet Group, and MHI Equipment Europe B.V., a fully owned subsidiary of Mitsubishi Heavy Industries Ltd. of Japan. Matelec and MHI were selected to develop the project by Senelec in April 2004, following an international competitive bid. The total project cost is estimated at approximately €68 million.

IFC’s financing consists of a €17 million loan. The project has also received financing from Société de Promotion et de Participation pour la Coopération Économique, Banque Ouest Africaine de Développement, the African Development Bank, and Compagnie Bancaire de l’Afrique Occidentale. The project will benefit from a partial risk guarantee from the World Bank’s International Development Association.

Francisco Tourreilles, Director of IFC’s Infrastructure Department, said, “The Kounoune power project is an important investment in Senegal’s power sector, as it adds reliable generation capacity that is crucial to the country’s economic growth. This investment demonstrates the significant potential that exists in the region for governments and the private sector to join efforts in developing critically needed infrastructure investments.”

Richard Ranken, IFC’s Director for Sub-Saharan Africa, said, “IFC’s financing to the Kounoune power project demonstrates our continued commitment to supporting key infrastructure projects in Sub-Saharan Africa. We are pleased to support the government’s efforts to consolidate reforms in Senegal’s power sector and improve its performance.”

“We welcome the support of IFC and other developmental agencies for this important project,” said His Excellency Madicke Niang, Senegal’s Minister of Energy and Mines. “It is our hope that the project will have a positive demonstration effect for future investments in Senegal’s electricity sector.”

Samuel Sarr, CEO of Senelec, noted, “The Kounoune independent power project is an important project for Senelec, as it will contribute to our efforts to meet consumers’ growing demand and will help us improve the quality of services in Senegal.”

Samer Nasr, CEO of Kounoune Power S.A., the project company, added, “The project benefits from a well-structured debt financing package. Under IFC’s leadership, the project brings together key multilateral and bilateral developmental institutions, whose support has enabled us to invest in Senegal’s power sector.”

The International Finance Corporation, the private sector arm of the World Bank Group, promotes sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Its 178 member countries provide its share capital and collectively determine its policies.

From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.

Contact Information

Ann Pasco

International Finance Corporation

Contact via E-mail