Africa Finance Corporation (“AFC” or the “Corporation”), the leading infrastructure development finance institution in Africa, is pleased to announce financial close of a bridge loan facility contracted by Ivoire Hydro Energy (“IHE”) for the construction of the 44-MW Singrobo-Ahouaty hydroelectric power project (“SAHP” or the “Singrobo-Ahouaty Hydropower Project”) and associated infrastructure. AFC’s commitment towards IHE amounts to a total of €174 million, comprising a majority equity investment of €24.4 million, and a bridge loan facility of €149.6 million. 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 an 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 5 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 currently generates 2,200 MW of electricity making it one of the leading generators of power in West Africa with approximately 70% 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.
In respect to the bridge facility closing, Samaila Zubairu, President & CEO of AFC, commented: “Since 2015, when AFC began working with SAHP as a financier and co-developer, we have achieved many development 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.
“The Singrobo-Ahouaty Hydropower Project is an example of AFC’s objective of supporting Africa in unlocking its economic potential while also attaining attractive returns for our shareholders. As our first equity investment in a hydro Independent Power Producer (“IPP”) and our first power equity investment in a Francophone country, SAHP is an optimal step in diversifying AFC’s power portfolio, building our balance sheet and expanding our reach across French-speaking Africa.”
Oliver Andrews, Executive Director & Chief Investment Officer of AFC, commented on SAHP’s bridge facility: “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.”
Tas Anvaripour, CEO of Themis, indicated: “Themis is proud to have contributed to the success of the SAHP, which is the first hydropower IPP to reach financial close in West Africa. Themis joined the original developers back in 2013 when the project was still in the feasibility stage. Complementary skills between the local sponsor, AFC and Themis was a project key success factor.”
Ekolan Alain Etty, the majority shareholder of IHE Holdings, said: “I am very pleased to see SAHP taking another stride towards development. Since I began working as an engineer in 1981, I have seen first-hand the opportunities electrification brings to a country. Today, however, it is not enough to have just power. We need a cost effective renewable and sustainable energy source so that development is inclusive and does not adversely affect the environment. The Singrobo-Ahouaty Hydropower Project achieves all of these objectives.”