Addax and Oryx Group Ltd. subsidiary Addax Bioenergy S.A. has signed a loan agreement with seven European and African development institutions for an integrated renewable energy and agriculture project in Sierra Leone.
The loan will help fund the development of a sugarcane plantation, construction of an ethanol refinery, and a biomass-fueled power plant. The power plant will provide renewable electricity for the ethanol refinery and will contribute approximately 20% to Sierra Leone’s national grid.
Under the agreement, the African Development Bank (AfDB), the Emerging Africa Infrastructure Fund (EAIF), the Netherlands Development Finance Company (FMO), the German Development Finance Institution (DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH), the South African Industrial Development Corporation (IDC), the Belgian Development Bank (BIO), together with Cordiant managed ICF Debt Pool, are providing debt financing of €133 million. The Swedish Development Fund (Swedfund) and FMO are to join AOG as equity partners. The total size of the investment is estimated at €258 million.
The agreement follows over three years of rigorous evaluations of the potential social, environmental and economic impacts of this innovative project which aims to become a model for sustainable investment in Africa. In addition to the independent studies that have already been conducted and are publicly available, the financing partners will perform on-going monitoring to ensure that the project fully meets its commitments.
Construction of the ethanol refinery and power plant will begin later this year, with production coming online in 2013. The project already employs over 700 people and will create over 2,000 jobs in steady operations.
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