Africa Finance Corporation (AFC) has announced the financial close of a bridge loan facility contracted by Ivoire Hydro Energy (IHE) for the construction of the 44MW Singrobo-Ahouaty hydroelectric power project (SAHP) and associated infrastructure
AFC’s commitment towards IHE amounts to a total of US$197.08mn, comprising a majority equity investment of US$27.64mn and a bridge loan facility of US$169.44mn. The first disbursement of the bridge loan facility occurred in December 2018.
IHE’s other shareholders include Themis, a project development company, and IHE Holding, a company incorporated by Ekolan Alain Etty, a local entrepreneur. The SAHP will be built by Eiffage, a French leading EPC contractor, selected following international competitive bidding.
AFC adopted an innovative financing strategy for the project. This involved utilising a bridge loan to shorten the project cycle and commence project construction. SAHP’s financing structure was designed to shorten the development phase for projects of this type from circa 10 years to fewer than five years. It is expected that this approach will accelerate the process of developing projects in Africa and enable more power projects to come on stream. AFC arranged the bridge loan facility to kick-start construction while awaiting long-term lenders to secure their final credit approvals. African Development Bank is arranging the long-term debt financing, most of which has already secured approvals.
Côte d’Ivoire generates 2,200MW of electricity making it one of the leading generators of power in West Africa with approximately 70 per cent through thermal generation with the remainder being renewables, mainly hydroelectric. The SAHP will increase the country’s overall power capacity as well as reduce generation costs due to the low operating cost of hydroelectric power. SAHP will also further Côte d’Ivoire’s goal of becoming a forerunner in the field of renewable energy.
Samaila Zubairu, president and CEO of AFC, commented, “Since 2015 when AFC began working with SAHP as a financier and co-developer, we have achieved many developmental milestones. 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 Côte d’Ivoire’s economic growth and social development.”
Oliver Andrews, executive director and chief investment officer of AFC, added, “AFC’s objective is to expedite the continent’s growth. Seeing as SAHP would not be able to continue with development and construction because it was awaiting finalisation of its long-term lenders’ credit approval processes, we decided it was an ideal opening for AFC to get further involved with the Project and continue participating in Africa’s IPP market.”
