MIGA Backs Investments in Power Generation and Distribution in Cameroon

MIGA Backs Investments in Power Generation
and Distribution in Cameroon
Actis’ involvement will expand the distribution network and reduce outages

View the press release in French 

Washington, July 14, 2014 – The Multilateral Investment Guarantee Agency (MIGA)—the political risk insurance and credit enhancement arm of the World Bank Group—announced today that it is supporting investments in three power sector projects in Cameroon. The investments in the national electric utility and two existing power generation projects will help meet growing demand for electricity and improve the overall efficiency and operation of the sector.

MIGA is providing guarantees of $180 million to Energy Cameroon Coöperatief B.A., a subsidiary of Actis, for its equity investment in Sonel, the privatized national electric utility. Sonel is the sole operator of transmission and distribution assets in Cameroon and also operates plants producing over 900 megawatts of power. MIGA’s eight-year cover is against the risks of transfer restriction, war and civil disturbance, and breach of contract.

“We will be applying our global expertise to introduce major improvements in the operation of Sonel,” says David Grylls, Partner at Actis. “These plans, which include investment, will expand and modernize the electricity distribution network, extend electricity service to unserved areas, and reduce outages. With demand for electricity growing by 5 to 6 percent per year, our planned sector improvements will benefit both the sector and our customers.”

In addition to its support for Sonel, MIGA is providing breach of contract cover for a period of up to 20 years for equity investments made by Globeleq Africa, a subsidiary of Actis, in the 216-megawatt Kribi gas-fired power plant and the Dibamba 88-megawatt heavy fuel oil plant. Globeleq Africa has acquired the shares of these independent power producers from AES, and will take over the operation and maintenance of the two plants, which are of critical importance to Cameroon. Together, these plants deliver more than 300 megawatts into the country’s grid, representing almost one-quarter of the country’s current installed capacity.  Globeleq also intends to expand the capacity at the Kribi plant by approximately 120 megawatts.

“Our extensive experience owning and operating electricity generation assets in 26 countries is outstanding,” says Mikael Karlsson of Globeleq. “Dibamba and Kribi are the only two independent power projects in Cameroon and we are really excited to be an active participant in the country’s power sector and contributing to economic development. These quality assets add significant capacity to the company’s existing platform in the region, further establishing Globeleq as the leading private power company in Africa.”

“Our support complements long-standing technical and financial assistance for Cameroon’s power sector by the World Bank and International Finance Corporation,” says Michel Wormser, MIGA Vice President and Chief Operating Officer. “Actis and Globeleq are making a significant commitment to Cameroon and we are pleased to be contributing to the power sector’s stability, continuity, and recovery by reducing the risk profile of their investment.”

__________________________
MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433

MIGA Contact:
Mallory Saleson, MIGA
Tel: +1 202 473-0844
E-mail: msaleson@worldbank.org

Rebecca Post, MIGA
Tel: +1 202-473-1964
E-mail: rpost@worldbank.org

Cara Santos Pianesi, MIGA
Tel: +1.202.458.2097
E-mail: csantospianesi@worldbank.org