Sendou-new

Due to Senegal's population and economic growth, there is an increasing demand for a stable energy supply, and the country's current overall energy production is insufficient to meet this demand. To diversify the energy supply and create a constant source of electricity—the base load—the government of Senegal decided in 2008 that a modern coal power plant should be built. 

In 2012, FMO signed a EUR 35 million loan agreement with Compagnie d’Electricité du Sénégal SA (CES) to develop the Sendou project. CES operates the Sendou coal-fired power plant near the town of Bargny, south of Dakar. In 2015, we provided a second loan of EUR 5 million for construction costs.  

The Sendou project was designed to improve the country's access to electricity and increase supply by 30% while enabling economic growth. The high number of direct and indirect jobs the project would create during both construction and operation was particularly significant for FMO when making the decision to invest. 

The Sendou project site is situated in a coastal area on 29 hectares of land near the villages of Minam and Bargny, 32 km from Dakar. Bargny is a fisher town with an estimated 80% of the 70,000 population relying on this sector for employment. The site is located within an area designated by the government of Senegal for further industrial development. This includes the Bargny-Sendou mineral port, with ongoing construction, which will become Senegal’s main industrial port. This port should lighten the congestion that is currently being felt in the old port of Dakar, the most important harbor for Senegal and neighboring countries.  

In 2015, FMO introduced its no-coal policy, which means that FMO no longer directly finances any new coal-fired power generation, nor do we finance coal mining projects. FMO’s decision to invest in the Sendou project preceded the adoption of this policy. 

The Independent Complaint Mechanism (ICM) of FMO received two complaints on this project, which were declared admissible in August 2016. The complaints were submitted by two groups: the environmental NGO Takkom Jerry (supported by Lumière Synergie pour le Développement) and Collectif des communautés affectées de Bargny, both representing several local collectives, such as fishermen, fish-drying women, and landowners.  

The complaints centre around the project’s lack of compliance with FMO’s Environmental and Social (E&S) policies and standards. Additionally, complainants raised questions regarding the initial ESIA (Environmental and Social Impact Assessment), the (cumulative) environmental impacts, the socio-economic impacts on the region’s fisheries industry, land rights issues, the community consultation process, and cultural issues. Following the admissibility of these two complaints, when it was decided that they would be merged, the Independent Expert Panel (IEP) of the ICM issued a Compliance Review Report in October 2017. The IEP issued its first Monitoring Report in January 2020, and a second one was issued in October 2023. A third Monitoring Report is expected to be published in 2025. All documentation related hereto is published on the ICM section of the FMO website.  

The ICM Report of 2017 found non-compliance with IFC Performance Standards 1, 3, and 5. Specific issues identified in the ICM Compliance Review Report are (i) impacts on drinking water, (ii) marine impacts, (iii) coal transport impacts, (iv) impacts on air quality, (v) economic displacement impacts on fish drying women, and (vi) land title issues.  

In its findings of October 2023, the IEP recognizes that FMO, since activities in the power plant resumed in 2021, has taken a very active stance in supervising the project and in making efforts to bring the project back into compliance. As a result of this engagement, the ICM further notes a strong commitment by CES to mitigate the serious environmental impacts while more progress and engagement are needed to address the social impacts (i.e., the concerns raised by the fish-drying women). 

The CES power plant faced technical setbacks, shareholder disputes, and governance challenges, leading to a complete shutdown in 2019. Following rehabilitation efforts completed in early 2023, the plant resumed full commercial operations, enabling FMO to re-engage with the new majority shareholder in addressing environmental and social non-compliances.

After the Commercial Operation Date (COD) in 2018, the CES power plant faced significant technical setbacks which prevented it from operating at full capacity. Disagreements among shareholders over remedies, multiple ownership changes, and a period of receivership further delayed progress. Persistent technical and governance challenges culminated in a complete shutdown in July 2019, placing the plant under receivership. 

A 2019 technical audit outlined the refurbishments needed to restore operations. Rehabilitation efforts took place between December 2022 and February 2023. By March 2023, the plant resumed operations for on-load commissioning, with further capacity tests in May 2023 confirming a net capacity of 112.35 kW. This concluded the rehabilitation phase and marked the start of full commercial operations. 

Because of the above-mentioned developments and the shutdown, FMO was unable to work with CES on addressing the E&S non-compliances for several years. After 2022, FMO conducted several on-site missions focusing on urgent environmental and social mitigation measures and steps to ensure compliance with the FMO E&S standards and resolving the complaint through the client. 

Since FMO introduced its no-coal policy, FMO has actively pursued an exit strategy for Sendou, aiming to balance financial recovery, address environmental and social (E&S) non-compliance issues identified by the ICM, and ensure the project’s future development under a credible party. With the sale of its outstanding loans in Compagnie d’Electricité du Sénégal (CES) to Kebe Capital, FMO officially ends its role as a lender to the project, marking the closure of its last active direct coal investment.  

Kebe Capital, an investment vehicle led by Mr. Kebe Ababacar, has a longstanding connection to CES. The Ababacar family has been involved with CES since its inception through their insurance company, Prevoyance Assurance, holding a 1.1% direct stake in CES. Following the exit of the Barak Fund, Kebe Capital became the controlling shareholder of Nordic Power AB, the parent company of CES.  

Currently, Nordic Power AB owns 94.89% of CES, with other shareholders including Nykomb Synergetics Development AB and SBEC Systems Ltd. Key lenders to CES now include the African Development Bank (AfDB), the West African Development Bank (BOAD), the Banking Company of West Africa (CBAO), and, more recently, Orabank Senegal.

Since the plant resumed operations in September 2021, FMO has worked closely with CES management and specialized consultants to address E&S non-compliance issues identified in the ICM Compliance Review and subsequent monitoring reports.

A significant milestone was achieved in November 2024 with the signing of the Social Action Plan (SAP) by Senelec, CES and the Mayor of Bargny, representing the affected communities of Bargny and Minam. The SAP defines the social actions that CES has committed to undertake in support of the community’s development over the next years. It results from an extensive participatory process that included an elaborate baseline assessment with support from an external social consultant, as well as frequent engagement and consultation with multiple stakeholders. For FMO, the commitment to the SAP demonstrates CES’s dedication to resolving outstanding issues directly with the communities, thereby establishing constructive dialogue at the project level.  

It is important to note that the ICM retains access to the project site for ongoing monitoring activities and that the FMO will closely monitor the IEP’s findings and/or additional inquiries related to the issued monitoring report(s).  

The plant is expected to remain operational under CES management. Preliminary discussions are underway for a potential second, gas-powered plant, though these plans depend on further deliberation by local stakeholders.