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14 June 2017

Emerging Africa Infrastructure Fund backs better future for Senegal with €6.6 million loan to expand power station

Tobene ll expansion to raise output by 19MW to 115MW

In a boost to the independent power sector in Senegal, the Emerging Africa Infrastructure Fund (EAIF) is increasing its lending to Melec PowerGen (Matelec Group), the owner and operator of the Tobene power station in Senegal. The new B loan of €6.6 million is part of the financing of an expansion of the plant. The first phase, which EAIF also lent to, was completed on time and within budget. It began producing power in 2016.

“Tobene ll” involves adding a new 19MW generating set to the existing 96MW facility. Installed capacity will increase to 115MW. Loans provided by EAIF now total €31.6 million. The new €6.6 million tranche has a term (tenor) of 13 years.

EAIF is a member of the Private Infrastructure Development Group (PIDG). Seven governments (and The World Bank) currently contribute funds to PIDG. In the case of EAIF, support comes from the governments of the UK, The Netherlands, Sweden and Switzerland, as well as private sector banks, the German development finance institution, KfW and its Dutch equivalent, FMO.

Completion of the expanded plant is expected shortly. The company financed the majority of the cost of the expansion using other short-term resources, and it is now restructuring the facility’s finances on a long-term and sustainable basis.

EAIF Chairman, David White, says that the success of the first phase of the project helps demonstrate to private sector companies and investors in the power industry that Senegal is a market of growing potential.

“Melec PowerGen is producing reliable, more affordable electricity for the economy and people of Senegal. It is now in a position to make a bigger commitment to the country. The expansion is a tribute to Matelec Group’s enterprise and the stability and potential of Senegal. I expect others will follow. EAIF is delighted to support the company. By backing Tobene ll EAIF is backing a better future for Senegal.”

Among the benefits the enlarged Tobene plant will bring to Senegal are savings of between US$25 and US$35 million a year to the country’s electricity utility, SENELEC; more reliable, power and at a competitive price; and displacing a proportion of the expensive and noisy rented diesel generators used in many businesses and homes.

Samer Naser, Chief Executive Officer at Melec PowerGen says,

“Senegal’s economy is becoming more robust as it grows. We are confident that the country is building a more stable and enterprising society. EAIF has once again supported our growth as a business and helped strengthen Senegal.”

A heavy fuel oil plant, the Tobene facility has the ability to convert to gas power if and when reliable and affordable gas becomes available, either from recently discovered oil and gas fields in Senegal or from neighboring Mauritania.

Senegal’s economy has been steadily strengthening over the past few years. Growth in 2014 was 4.3%, rising to 6.5% in 2015 and again to 6.6% in 2016. The projection for 2017 is above 6%. Senegal, which has a population of c16 million people, is classed as low-income country and is one of the world’s least developed nations. 43% of its people are aged under 15. Life expectancy is some 10 years below the global average.

The country has a national economic development strategy called Plan Senegal Emergent (PSE). Enlarging and upgrading its infrastructure is at the centre of the plan, which also includes improving the business environment to foster private investment. For the past two years, the World Bank has included Senegal in its top ten reforming nations.

EAIF is managed by Investec Asset Management (IAM), one of the largest third-party investors in private equity, credit, public equity and sovereign debt across the African continent.

Nazmeera Moola is Head of EAIF at Investec Asset Management. She says,

“Over the last five years, Senegal has successfully raised its growth rate above 4% and is working hard to consolidate its budget deficit. The country’s focus and concerted effort to implement structural reforms should support Senegal’s growth over the medium term. As the country tackles its structural challenges, EAIF is committed to supporting its infrastructure build out.”

IFC acted as Mandated Lead Arranger and A Lender, Banque Ouest Africaine de Development (“BOAD”) as Lender and EAIF and FMO, the Dutch Development Agency as B Lenders.

ENDS

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Emerging Africa Infrastructure Fund announces first project in Mali

90MW power station to increase Mali’s effective base load electricity by 30%

The private sector Malian power plant operator, Albatros Energie Mali (AEM), is to build a 90MW HFO-fueled power station in the Kayes region of the country, adding 30% to Mali’s effective base load electricity capacity. The €123.1 million project has the support of a €5.8 million 15-year term conventional loan and €3.9 million Sha’ria financing facility with a 14-year term, both from the Emerging Africa Infrastructure Fund. It is the Fund’s first project in Mali.

June 2017

EAIF manager wins Credit Deal of the Year award for IHS Nigeria US$800 million bond issue

At an awards ceremony at London’s Savoy Hotel on 1st June, the Emerging Africa Infrastructure Fund (EAIF), shared in the congratulations when its manager, Investec Asset Management, won the Credit Deal of the Year award from Private Equity Africa. The award marks the successful US$800 million bond issue by IHS, one of Nigeria’s leading telecommunications businesses. EAIF invested US$50 million in the bond.

June 2017

Emerging Africa Infrastructure Fund backs US$76 million 40MW solar farm in Mozambique

Project key to development strategy for SMEs in rural Mocuba region

The Emerging Africa Infrastructure Fund (EAIF / the Fund), which is part of the Private Infrastructure Development Group, has signed a Participation Agreement with the International Finance Corporation (IFC) to provide a US$16.9 million B Loan, with a +16-year term, to Central Solar de Mocuba (CESOM), the private sector developer of the Mocuba solar farm in Northern Mozambique. In addition, EAIF is directly providing a US$7m Viability Gap Funding Grant for the Project raised from the Technical Assistance Facility (TAF) of the PIDG. The US$76 million plant is due to be completed in mid-2018. It will be a core element in the Mozambique government’s strategy of incentivising the creation of small and medium-sized businesses in the mainly rural Mocuba area.

May 2017

Bond issue supported by EAIF as anchor investor wins prestigious award from The African Banker Magazine

The Emerging Africa Infrastructure Fund (EAIF) is pleased to congratulate Standard Bank on winning The African Banker Magazine’s” Debt Deal of the Year Award”. Standard Bank led the successful US$600 million Helios Towers Africa (HTA) bond issue. HTA is a leading telecommunications infrastructure and power operator in Africa. Following the bond issue, it is set for expansion.

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