On June 12, 2014, MIGA issued a guarantee of €23.3 million ($31.5 million equivalent) covering an investment by Globeleq Energy Holdings (Cameroon) B.V. of the Netherlands in Dibamba Power Development Corporation in Cameroon, together with future earnings. MIGA’s coverage is for a period of up to 20 years against the risk of breach of contract.
The project involves the acquisition, operation, and potential expansion of the 86-megawatt Dibamba heavy fuel oil power plant. Globeleq has acquired the shares of the independent power producer previously held by AES. Dibamba Power Development Corporation (DPDC) is now owned 56 percent by Globeleq and 44 percent by the government of Cameroon. AES Sonel is the sole off-taker of electricity produced by DPDC under a 20-year tolling agreement. The potential for expansion or conversion of the facility to run on gas is currently being considered.
Energy shortages and the high cost of electricity have slowed growth in Cameroon for the past 15 years, with an estimated loss in GDP growth of 1 to 2 percent each year. According to the World Bank’s 2007 Investment Climate Assessment for Cameroon, two thirds of manufacturing firms cite power deficiencies as a constraint to doing business, leading to losses as high as five percent of production value on average. This investment will ensure the continued operation of DPDC and boost its overall efficiency and reliability.
MIGA’s support for this investment is aligned with the Agency’s strategic priorities of supporting investments into complex infrastructure projects and countries eligible for concessional financing from the International Development Association.