Efficient Financing Makes a Difference in Senegal

Children in Senegal are among millions who will benefit from more reliable electricity. / USAID Senegal
Children in Senegal are among millions who will benefit from more reliable electricity.
USAID Senegal

In November, the Overseas Private Investment Corporation (OPIC), the U.S. Government's development finance institution, and IFC, a member of the World Bank Group, announced an innovative financing agreement for the 53 megawatt Cap des Biches power plant in Senegal. Working with project developer, ContourGlobal, the Government of Senegal and Senegal’s national electricity utility, the two Power Africa partners helped advance a project that will address the growing demand for electricity in Senegal.

The importance of this project was highlighted by President Obama at the U.S.-Africa Leaders Summit in 2014, along with other new U.S. investments in Africa.

“The Cap des Biches financing agreement is tangible evidence of the power of Power Africa,” said Joseph Brandt, CEO of ContourGlobal. “It is by far the fastest project that I have ever worked on in Africa, and Power Africa made all the difference. This project would have taken four years in the absence of Power Africa. Instead it took one. This is the power of an idea that is embraced and sponsored by the United States."

Key to making the financing work was drawing together a coalition of experts to solve the challenge of raising the most cost-effective long-term capital.

“To do this in sub-Saharan Africa is amazing,” said Brandt. “Because OPIC and IFC were willing to challenge basic assumptions, they found new and innovative approaches that will ultimately help create new and very low cost electricity for Senegal -- indeed the lowest cost of baseload capacity in the country's history.”

In addition to support from OPIC and IFC, the U.S. Embassy in Dakar also assisted the lenders and ContourGlobal in working with the Government of Senegal to comply with legal, environmental, banking and regulatory requirements, helping to smooth the way for the Cap des Biches transaction. This support was critical to keeping all parties at the table, and to reassure the Government of Senegal when there were concerns or issues to clarify.

This success in Senegal shows that the Power Africa model is working. While reaching our goals of 30,000 megawatts and 60 million new electricity connections won’t happen overnight, we are consistently finding innovative ways to get there faster.

By leveraging the strength and expertise of U.S. Government agencies like OPIC, leading international development finance institutions like IFC and dedicated project developers like ContourGlobal, Power Africa is helping to improve lives and energize economies across the continent, as quickly as possible.

Last updated: June 07, 2016

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