IFC Supports Public-Private Partnership for Power Plant in Yemen

Sana’a, May 2008 —IFC, a member of the World Bank Group, today signed an advisory agreement with Dr. Mustafa Bahran, Minister of Electricity and Energy of the Republic of Yemen, to help the government mobilize private investment for a new gas-fired independent power generation plant (“IPP”).

Yemen has one of the lowest rates of electricity capacity per capita in the Middle East and North Africa. Inability to meet a demand growing by almost 10 percent a year has resulted in power shortages and reliance on inefficient, costly diesel-fired rental units. By undertaking its first IPP, the government aims to increase private investment in the country’s power sector, make the electricity supply more reliable and accessible, and lower both its dependence on oil and the cost of power generation.

The project is part of the government’s objective to improve infrastructure and public services through public-private partnership transactions, while building a conducive legal, regulatory, and economic environment for sustainable private sector participation in public services.

Dr. Bahran said, “This project is an important step toward achieving the objective of increasing Yemen’s power-generating capacity to 1,400 megawatts by 2010, using alternative fuel. The initiative will ensure the supply of more affordable and reliable electricity through new power generation.”

Jesper Kjaer, General Manager of IFC Advisory Services in the Middle East and North Africa, PEP_MENA, added: “Our work with the government of Yemen focuses on ensuring that they structure a partnership with the private sector that balances the commercial viability of the power plant with benefits for the general public. Structuring such mutually beneficial public-private partnerships is an area of expertise that IFC has developed from experience in similar projects around the world.”

IFC Advisory Services in the Middle East and North Africa – PEP-MENA – will support the project. IFC PEP-MENA focuses on helping develop viable public-private partnership projects in infrastructure, improving the business enabling and regulatory environments in the region, strengthening the financial sector, and promoting the growth of small and medium enterprises.