Africa50, Melec PowerGen, Senelec and Orabank Group Secure €75 million Syndicated Bridge Loan for Completion of Malicounda Power Plant in Senegal
Aerial view of the Malicounda power plant construction site- With this local-currency bridge loan, Africa50 has helped increase local banks’ participation in infrastructure project financing in Africa
- Transaction allows partners to maintain a target completion date of end of 2021
- Project contributes to Senegal’s transition towards cleaner, more reliable and cheaper energy generation.
Casablanca, 1 March 2021 – Africa50, the pan-African investment platform, has announced that it has secured an FCFA 50 billion (€75 million) bridge loan arranged by Oragroup, the holding company of pan-African banking group Orabank, through a syndication involving Orabank Group’s partners banks operating in the West African Economic and Monetary Union Zone (WAEMU). This bridge loan will help complete the construction of the Malicounda Power Plant in Senegal this year. Africa50 is also undertaking a parallel process to raise long-term senior debt for the project. The project - whose shareholders comprise Melec Powergen (MPG), Africa50, and the country’s national utility, Senelec - entails the construction and operation of a 120MW combined cycle thermal power plant located in Malicounda, 85 kilometers from Dakar.
This bridge loan was achieved by leveraging the strengths of the sponsors. Africa50 is leading the financial aspects of the project and was responsible for sourcing the bridge loan provider, structuring the terms of the transaction, and leading negotiations towards closing on the bridge loan within one month. MPG, the lead co-developer, brought its experience in power infrastructure with solid regional knowledge, while Senelec provided strong institutional support. Oragroup, the majority stakeholder of banking group Orabank, operating in twelve countries in West and Central Africa, syndicated the local currency bridge loan facility amongst a banking pool comprising WAEMU regional banks, which will help complete remaining construction works. The African Development Bank, as mandated lead arranger for the project’s senior debt, facilitated discussions with Oragroup and will continue to play a critical role towards securing long-term debt.
About the Malicounda power plant project in Senegal
The project’s total cost is estimated at FCFA 100 billion (€150 million). Construction started in October 2019 with all-equity financing, to accelerate implementation, in anticipation of raising senior debt financing later on.
Developed within the framework of Senegal’s national power sector strategic plan, the Malicounda plant is expected to produce more than 956 GWh of energy a year. The electricity generated will be sold under a 20-year power purchase agreement with Senelec and is expected to increase the country’s power generation capacity by about 17%, while reducing generation costs by about 14%.
The plant uses more fuel-efficient and environment-friendly technologies compared to older open-cycle plants. The plant is also convertible and will use natural gas once this becomes available from local fields, shifting Senegal’s energy mix from diesel to cleaner fuel.
The project has created up to 150 direct jobs while the additional energy produced is expected to increase production in the country, potentially adding up to 76,000 jobs in the long run. Construction is expected to be completed by the end of 2021.
Media Contact
Fleur Tchibota, Director of Communications
+212 666 17 10 99
Category: Press Release