The World Bank Group has approved a US $794.5m investment package for Cameroon’s Nachtigal Hydropower project. This is with a view to helping the country attain its goal of providing access to electricity for 88% of its people in the next four years.
The World Bank country director for Cameroon Elisabeth Huybens lauded the move, adding that the investment in clean energy will help lower the cost of electricity. This, in turn, guarantees a competitive economy. She also noted that the project is one of the very few public-private partnership (PPP) hydropower projects in sub-Saharan Africa that will accelerate Cameroon’s realization of its development goals.
The Nachtigal Hydropower project builds on a sustained, 20-year engagement in the energy sector by the World Bank Group in Cameroon. Once completed, it is expected to increase the country’s electricity generating capacity by 30%. It is also projected to provide greater opportunities for the poor, who are disproportionately excluded from economic activities due to inadequate power supply.
Meanwhile, the bank noted that over the past two decades, Cameroon has embarked on a series of sector reforms in the power sector. This has been for the purposes of enhancing financial viability and attract private sector investment.
According to media reports, among the guarantees forming the package include US $300m from the International Bank for Reconstruction and Development (IBRD) and US $262m from the Multilateral Investment Guarantee Agency (MIGA). There is also equity totaling US $70m, loans worth US $152m and currency risk management swaps from the International Finance Corporation (IFC). These funds serve to bring sustainable private sector solutions to the infrastructure sector.
The IFC director for Africa Oumar Seydi, referred to the project as a significant example of how the finance corporation is employing the use of InfraVentures to implement projects across Africa. Mr. Seydi who has been working as co-developer of the project since 2013, also explained IFCs role in mobilizing the debt package as the global coordinator of theproject’s senior debt.