On June 12, 2014, MIGA issued a guarantee of €57.8 million ($78.2 million equivalent) covering an investment by Globeleq Energy Holdings (Cameroon) B.V. of the Netherlands in Kribi Power Development Corporation in Cameroon, together with its 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 216-megawatt Kribi gas-fired power plant. Globeleq has acquired the shares of the independent power producer previously held by AES. Kribi Power Development Corporation (KPDC) is now owned 56 percent by Globeleq and 44 percent by the government of Cameroon, and has a generating license for 330 megawatts. The plant runs on natural gas supplied from the offshore Sanaga South gas field in Cameroon. AES Sonel is the sole off-taker of electricity produced by KPDC under a 20-year power purchase agreement.
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 continued operation of KPDC and improve 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.