Africa Finance Corp. (AFC) announced the 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)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 utilizing 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.