FMO has signed a EUR 30m loan to Azito Energie S.A. This financing will provide an effective response to Ivory Coast’s growing electricity needs via the expansion of the Azito power plant. The project confirms AFD Group’s continued support to Ivory Coast’s power sector and is part of a broader approach to assist the country’s energy transition.
Improved access to electricity for 6 million Ivorians
Only 65% of the Ivorian population currently has access to electricity and the electrification rate is under 40% in rural areas. Domestic electricity demand, driven by the ambitious programs launched by the authorities to increase access to electricity and by the economic growth experienced by the country, is expected to increase by about 5% a year or even more by 2025, creating a generation deficit.
The expansion of the capacity of the Azito combined cycle gas turbine power plant, which is connected to the domestic grid, will increase the power generation capacity and will thereby contribute to providing an effective response to the needs of West Africa’s leading economy. It is currently the country’s best alternative to address its growing electricity demand.
The additional 253 MW will increase the power plant’s total capacity to 710 MW. Azito should thereby supply about 30% of domestic electric power starting in 2021, the planned commissioning date for the Azito 4 expansion.
By supplying some 2,000 GWh of additional electricity every year, this project should improve access to electricity for over 6 million people. The additional energy will meet growing demand, in particular from rural areas, thanks to grid extension projects which are currently under development.
It will also reduce the problems of quality and reliability of supply experienced by the country (about 16 hours of cut-offs on average per year). Finally, the expansion will benefit from a less energy-intensive technology, about 50% more efficient compared to an open cycle power plant with the same capacity, which will make it the most efficient in the country and will limit the use of inefficient power plants.
Finally, in addition to improving access to electricity, this project will create or maintain over 125,000 jobs (direct and indirect) and will provide Ivory Coast with EUR 11m of annual tax revenues.
A project supported by a consortium of partners
The project will be financed via shareholders’ equity and debt provided by development finance institutions, such as FMO, the African Development Bank (AfDB), West African Development Bank (BOAD), OPEC Fund for International Development (OFID), International Finance Corporation (IFC), French (PROPARCO), Belgian (BIO) and German (DEG) counterparts and the Emerging Africa Infrastructure Fund (EAIF), which is a PIDG company. IFC arranged the full debt financing package of EUR 264 million.
The project will be developed by two major players in the energy sector in Africa who are key partners for AFD Group: Globeleq, one of the leading independent power producers in Africa, and IPS West Africa, one of Aga Khan’s investment vehicles in Africa.
Also supporting the country’s low-carbon transition
Beyond this project FMO, AFD Group, IFC, BIO, DEG and EAIF are actively supporting Ivory Coast’s energy and low-carbon transition. The support of development finance institutions is demonstrated by a strong political dialogue aiming at continuing to develop solutions and investments in the field of renewable energies, which will benefit from their financial support.