President Macky Sall signed three deals worth more than $600 million to boost electricity generation capacity in Senegal with Lekela Power, ContourGlobal and Black Rhino Group on the sidelines of the 2nd U.S. – Africa Business Forum held in New York City on September 21, 2016.
The Government of Senegal and Black Rhino Group, a Power Africa Partner, signed a Memorandum Of Understanding for the development of a $300 million 200MW dual fuel power plant. The project will utilize readily available fuel in the short term to add capacity to the Senegalese grid, and will capitalize on recently discovered domestic natural gas resources in the long term. The power plant will help Senegal to reduce electricity prices while improving the reliability of the system, thus enhancing the competitiveness of local businesses.
OPIC is providing up to $250 million in financing and $70 million in reinsurance to Parc Eolien Taiba N’Diaye (Lekela Power) for the development, construction and operation of a 158-megawatt wind farm in Taiba N’Diaye, Senegal. Senegal suffers from a chronic deficit in electricity supply with regular power rationing and blackouts that adversely affect living conditions and economic development. This project will boost Senegal’s generation capacity by nearly a quarter and provide a critical foundation for Senegal’s power generation and sustainable energy growth plan.
OPIC has committed an additional $53 million in financing and $23 million in insurance to ContourGlobal’s Cap des Biches project in Senegal for a 33 MW expansion project. This OPIC-supported project will provide efficient and reliable electricity to the Senegalese grid by adding a total of 85.9 MW generation capacity.
Electricity is a development imperative and a prerequisite for sustained economic growth. It is estimated that Senegal must generate an additional 130 megawatts to meet its current needs.
The Cap des Biches project plays a significant role in helping to meet the 5 to 8 percent annual growth in demand for electricity. SENELEC, Senegal’s national electricity utility, will be the off-taker for the power generated by the project.
The Taiba N’Diaye project is expected to increase Senegal’s available installed power capacity by 24 percent.
The cost of electricity in Senegal is high because nearly 90 percent of the electricity is currently generated using costly oil-based fossil fuel.
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