Bank, Niger sign funding deal for 125-MW Kandadji Dam, ecosystems

Officials of the African Development Bank Group (AfDB) and the government of Niger have signed loan and grant agreements to finance the Kandadji Ecosystems Regeneration and Niger Valley Development Program, which includes the 125-MW Kandadji Dam on the Niger River.

AfDB’s African Development Fund (ADF) approved in October a combined loan and grant of 40 million Units of Account (UA) (US$62 million) for the program. (HNN 11/6/08) ADF approved a loan and a grant of UA20 million (US$31 million) each.

The signing was performed in a November 17 ceremony at bank headquarters in Tunis, Tunisia. Signing for the AfDB was Sectoral Operations Vice President Zeinab El-Bakri. Niger Finance Minister Ali Mahaman Lamine Zeine signed for his government.

The funding is to help provide solutions to the recurrent drought in Niger and the degradation of natural resources by regenerating the riverine ecosystems and boosting agricultural production with poverty reduction as the ultimate goal.

The program includes construction of a dam of 1.6 billion cubic meters for regulating the flow of the Niger River in order to provide the water needed for irrigation, drinking water, sanitation, ecology, grazing, and fisheries. About 629 gigawatt-hours of electricity will be provided annually as a by-product that will make the structure as profitable as possible, the bank said.

The project’s first phase is estimated to cost UA186.2 million (US$290 million), about 56 percent of the overall cost of UA333.82 million (US$519.8 million). Part of the ADF money will go to implementation of environmental and social plans and program management.

Niger President Mamadou Tandja laid the first brick of Kandadji Dam August 3, about 180 kilometers northwest of Niamey. The dam is due for completion in 2013.

Earlier this year, the Arab Bank for Economic Development in Africa agreed to lend US$10 million to Niger to help finance the first phase of the dam. Kandadji Dam also is being funded by the Islamic Development Bank, which has pledged US$236 million. Financing for the hydropower station is due to come from a public-private partnership, the government has said.

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