Africa, Finance, New Development

AFC invests €174 million in 44-MW Singrobo-Ahouaty Hydroelectric in Cote d’Ivoire

Africa Finance Corporation (AFC) has announced financial close of a bridge loan facility contracted by Ivoire Hydro Energy (IHE) for construction of the 44-MW Singrobo-Ahouaty hydroelectric power project and associated infrastructure.

AFC’s commitment to IHE amounts to a total of €174 million (US$197.8 million), comprising a majority equity investment of €24.4 million (US$27.7 million), and a bridge loan facility of €149.6 million (US$170.1 million). The first disbursement of the bridge loan facility occurred in December 2018, AFC said.

IHE’s other shareholders include Themis, a project development company, and IHE Holding, a company incorporated by Ekolan Alain Etty, a local entrepreneur. The project will be built by Eiffage, a French leading EPC contractor, selected after an international competitive bidding.

AFC’s innovative financing strategy for the project involved using a bridge loan to shorten the project cycle and commence construction. The financing structure was designed to shorten the development phase for projects of this type from about 10 years to fewer than five years. This approach is expected to accelerate the process of developing projects in Africa and enable more power projects to come on stream, AFC said.

“We are proud to be a major investor and facilitator in the Singrobo-Ahouaty Hydropower Project because this new source of renewable power will be integral to Cote d’Ivoire’s economic growth and social development,” said Samaila Zubairu, president and chief executive officer of AFC. “The Singrobo-Ahouaty Hydropower Project is an example of AFC’s objective of supporting Africa in unlocking its economic potential while also attaining attractive returns for our shareholders. As our first equity investment in a hydro Independent Power Producer and our first power equity investment in a Francophone country, [this project] is an optimal step in diversifying AFC’s power portfolio, building our balance sheet and expanding our reach across French-speaking Africa.”

African Development Bank is arranging the long-term debt financing, most of which has already secured approvals.

Côte d’Ivoire has electric generating capacity of 2,200 MW, with about 70% coming from thermal generation and the remainder being renewables, mainly hydropower.

AFC is an investment-grade multilateral finance institution, established in 2007 with an equity capital base of US$1billion to be the catalyst for private-sector-led infrastructure investment across Africa. AFC has a current balance sheet size of about US$4.2 billion and to date has invested about US$4.5 billion in projects within 28 countries across Africa.

Other hydropower facilities under construction in the country include 112-MW Gribo-Popoli, on the Sassandra River.

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