MIGA, a member of the World Bank Group, has issued €6.9m in guarantees to support the construction, interconnection, operation and maintenance of two solar power plants in Western Senegal.

Those are the 25MWac Kael plant, to be built near the city of Touba, and the 35MWac plant Kahone plant, to be located near the city of Kahone.

"We are pleased to support Senegal’s efforts to diversify its energy mix, and helping private investors contribute to real development impact," MIGA Executive Vice President and CEO Keiko Honda said.

"These solar plants will deliver cheaper and cleaner energy from domestic sources, while contributing to global CO2 reduction."

The guarantees have been issued, alongside loans from the International Finance Corporation, to Paris-based global developer, investor and asset manager, Meridiam, and to a subsidiary of French electric utility company, Engie.

“Together with the Senergy and the Ten Merina solar plants, these projects are Meridiam’s third and fourth developments in Senegal,” Thierry Déau, CEO of Meridiam said.

“They illustrate how committed we are to support further the transition of Senegal towards more clean and affordable energy while creating business opportunities for local communities.”

MIGA’s guarantees provide protection against non-commercial risks for a duration of up to 15 years.

The electricity generated by the Kael and Kahone plants will be sold to Senelec, the State-owned power utility, under separate 25-year Power Purchase Agreements.

Both plants will be connected to the national grid through new transmission lines that will be handed over to Senelec upon construction.

Engie Senegal will operate and maintain the plants under 25-year Operation and Maintenance contracts.

Kael and Kahone, the first two grid-scale solar PV plants procured through competitive bidding in Senegal, were awarded in April 2018 through the Scaling Solar Program developed by the World Bank Group as a “one-stop shop” for governments to rapidly mobilize privately funded, grid connected, solar projects at competitive tariffs.

The Program has facilitated record-low tariffs of €¢3.98/kWh for the Kael plant and €¢3.80/kWh for the Kahone plant, which will be providing the cheapest source of electricity to date in the country.

At present, Senegal marks the second implementation of Scaling Solar after Zambia.

The two plants will contribute to an increase by approximately 6% in Senegal’s installed capacity and help avoid 89,000 tons in yearly CO2 emissions between 2020 and 2044.

CO2 emissions from electricity and heat production currently account for 37% of total fuel combustion in Senegal, with heavy fuel oil representing roughly 83% of the generation mix.

Senegal’s power sector has recorded improvements over the last five years, but electricity costs remain high.

The Government of Senegal has implemented reforms over the past two decades focused on liberalizing the generation segment of the market, addressing a widening demand-supply gap and diversifying the energy mix to shift away from imported heavy fuel oil and diesel.

Renewable generation capacity in Senegal is expected to represent more than one fifth of the country’s energy mix by 2025.