Gabon to Develop First Private Sector Led Hydropower Plant with MIGA Support
* This press release has been updated since it was first issued. The original version referred to this project as being ‘Paris-Aligned.’ MIGA is still developing its Paris Alignment methodology.
WASHINGTON DC, March 15, 2022 — MIGA has issued guarantees to Meridiam for equity investments into Asonha Energie SA, which will build and operate the 35MW Kinguélé Aval Hydropower Plant in Gabon. The 20-year guarantees totaling Euro 25.3 million (approximately US$28.7 million) provide protection from breach of contract, expropriation, transfer restriction and currency inconvertibility, and war and civil disturbance.
Gabon has a comparatively high national electrification rate of 93 percent with about 374,000 customers connected to its five regional interconnected networks. However, the country’s power generation capacity is under strain due to the growing population, increased urbanization, and industrial development. Historically, electricity has been generated mostly by hydropower plants.
Given the rapid growth of demand and lack of planning in recent years, reliance on expensive and polluting thermal generation using liquid fuels has increased and now accounts for more than half of national electricity production. Besides increasing the cost of service, this growth in thermal capacity has increased the sector’s carbon footprint. Gabon’s electricity demand is expected to grow as much as 3.7 percent annually.
Gabon has among the highest potential for hydropower in Africa. The government of Gabon (GoG) is taking steps to transition into sustainable energy sources and create a single national integrated grid using hydropower. GoG intends to rely on independent power producers (IPP) to exploit its largely untapped hydro potential. The Plant is the first IPP undertaken in Gabon at a cost of Euro 179 million. It will bring low-cost clean power generation capacity to support electricity demand in Gabon’s capital, Libreville, and restore financial viability of Gabon’s power sector. Additionally, the Plant will supply around 32,000 new customers, increase GDP by US$40 million, and create an estimated 880 indirect and induced jobs.
“Gabon’s first IPP project highlights a commercially viable way to generate clean energy that will avoid over 90,000 tons of CO₂ emissions per year,” MIGA Executive Vice President, Hiroshi Matano, said. “Working with IBRD and IFC, MIGA’s support will enhance Gabon’s electricity supply and reliability while ensuring alignment with internationally recognized performance standards.”
Asonha Energie SA was created to develop the Kinguélé Aval Hydropower Project by way of a BOT concession for 30 years. The company is owned 60 percent by Meridiam SAS France (Meridiam) through its Meridiam Funds. The Fonds Gabonais d’Investissements Stratégiques (FGIS), Gabon’s sovereign wealth fund, owns 40 percent through its wholly owned subsidiary Gabon Power Company. FGIS was established in 2012 to assist Gabon in developing new industries to generate revenues other than oil-related income.
Meridiam, is an independent investment Benefit Corporation under French law and an asset manager specialized in long-term infrastructure projects with more than 100 projects and assets across 23 countries in Africa, America, and Europe. Meridiam is a strategic partner for MIGA in both the Sub-Saharan Africa and East and Central Asia regions. MIGA guarantees for this project are considered critical given Gabon’s electricity sector challenges and risks posed by the broader political and economic environment.
“Kinguélé Aval Hydropower plant will bring positive benefits to Gabon's economy, support its social development but also contribute concretely to its ongoing ecological transition. Leading to the replacement of existing thermal capacity, it is expected to supply around 13% of the electrical needs of Libreville, and help Gabon save more than 150,000 tons of CO₂ emissions per year. Finally, and thanks to the project, more than 800 local jobs will be created during the construction and operation phase,” said Thierry Déau, Founder and CEO of Meridiam.
MIGA’s support for this first IPP project is expected to send a positive signal to the market within the context of a broader World Bank Group engagement in the power sector in Gabon.
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About Meridiam
Meridiam was founded in 2005 by Thierry Déau, with the belief that the alignment of interests between the public and private sector can provide critical solutions to the collective needs of communities. Meridiam is an independent investment Benefit Corporation under French law and an asset manager. The firm specializes in the development, financing, and long-term management of sustainable public infrastructure in three core sectors: sustainable mobility, critical public services, and innovative low-carbon solutions. With offices in Addis Ababa, Amman, Dakar, Istanbul, New York, Luxembourg, Paris, Toronto, Vienna, Libreville, and Johannesburg, Meridiam currently manages US$18 billion and more than 100 projects to date. Meridiam is certified ISO 9001: 2015, Advanced Sustainability Rating by VigeoEiris (Moody’s), ISO 37001 Anti-Corruption certification by AFNOR and applies a proprietary methodology in relation to ESG and impact based on United Nations’ Sustainable Development Goals (SDGs).
About MIGA
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over US$65 billion in guarantees across 120 developing countries.
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