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World Bank Group member Multilateral Investment Guarantee Agency (MIGA) has announced its support to three power projects in Cameroon
MIGA, the political risk insurance and credit enhancement body of the World Bank, will back investments in Cameroon’s private electric company Sonel, the Kribi gas-fired power plant and the Dibamba heavy fuel oil plant.
With the demand for electricity growing by six per cent annually, this agreement would help improve efficiency in these utilities and meet the growing need for power in the Central African nation.
According to MIGA, the organisation has agreed to provide a guarantee of US$180mn to Energy Cameroon Coöperatief B.A. for an equity investment in Sonel. The private electric utility operates transmission and distribution assets in Cameroon and manages plants producing over 900MW of power. MIGA’s cover is for a period of eight years against transfer restriction, war, civil disturbance and breach of contract.
Additionally, MIGA is providing a breach-of-contract cover for a period of up to 20 years for equity investments made by Globeleq Africa in the 216MW Kribi power plant and the 88MW Dibamba plant. The two plants contribute to almost a quarter of the country’s current installed capacity.
Mikael Karlsson, CEO of Globeleq, said, “Dibamba and Kribi are the only two independent power projects in Cameroon and we are really excited to be an active participant in the country’s power sector. These quality assets add significant capacity to the company’s existing platform in the region, further establishing Globeleq as the leading private power company in Africa.”
Globeleq Africa has acquired shares of the two power plants and will take over the operation and maintenance as well. It also intends to expand the capacity at the Kribi plant by nearly 120MW.