31 Oct 2018
25% electricity boost for Mali as €122 million power station opens
Project demonstrates value of PIDG companies’ collaborative blended finance approach.
The value of innovative blended financing for major infrastructure projects in Africa was demonstrated today with the opening of the 90MW Albatros Energy Mali (AEM) power station in Hawa-Dembaya district, Mali. The plant is expected to increase Mali’s effective base load electricity capacity by 25%, providing up to 4.5 million people with improved access to power and paving the way for new renewable energy facilities.
The €122 million power plant has the support of a €5.0 million, 15-year term conventional loan and a €3.8 million Sha’ria financing facility with a 14-year term from PIDG company the Emerging Africa Infrastructure Fund (EAIF). Other project lenders are the West African Development Bank, the Islamic Development Bank, the Islamic Corporation for the Development of the Private Sector and the OPEC Fund for International Development.
The project has drawn on support from other PIDG companies to ensure its success. PIDG’s Technical Assistance Facility (TAF) assisted AEM with $500,000 of funding to support legal and environmental studies. GuarantCo provided a €3.8m 13-year Debt Service Reserve Account (DSRA) guarantee to AEM.
Working with the PIDG companies is of great value to us. They bring specialist expertise, innovative thinking and a determination to help us succeed in challenging environments.
By establishing this long-tenor DSRA guarantee, GuarantCo created a financial structure for the project which is unique to Mali and to the country’s energy sector. The significant benefit of the DRSA guarantee is that the legal obligation to reserve cash to service interest and principal payments on the debt, can now be used for other purposes.
AEM’s new power station is in the Kayes region of Western Mali, one of the country’s most important mining hubs. Mali’s economy will benefit from having a reduced power import bill, more reliable power for business and industry and see less need for rented mobile generating capacity.
Power from the AEM plant is being supplied to Mali’s national grid, bringing the country improved reliability of supply to major cities and low to medium voltage users. As large industries become connected to the grid the plant will contribute to their power needs. 381 local people were recruited to build the plant, which was delivered ahead of schedule. 50 of the plant’s 53 permanent staff were locally recruited.
Electricity is the single most valuable element in bringing hope and opportunity to fragile states. The Albatros Energy plant can be an engine for sustained economic progress and improve the daily lives of many thousands of people. AEM, with the support of the PIDG companies, has delivered a private sector project of fundamental importance to Mali’s future.
The inauguration was attended by Ibrahim Boubacar Keita, President of the Republic of Mali, and by UK Ambassador to the Republic of Mali, Cat Evans. AEM Chairman Amadou Sow and CEO Koenraad Beckers oversaw the official opening. Emilio Cattaneo, Executive Director of the Emerging Africa Infrastructure Fund, also attended, alongside Tania De Beers, representing EAIF’s fund manager, Investec. Alex Hazoury attended on behalf of GuarantCo.
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