The Overseas Private Investment Corporation, the US Government's development finance institution, and IFC, a member of the World Bank Group, last week signed financing agreements for the 53 megawatt Cap des Biches power plant with project developer ContourGlobal, the Government of Senegal, and Senegal’s national electricity utility to help address growing demand for electricity in the country.

Under an innovative financing model, IFC, the lead arranger of the debt, is providing a cross currency swap, while OPIC will lend up to $91m to the project.

Cap des Biches is a modern, heavy fuel, oil fired thermal power plant that guarantees high efficiency levels and lower cost of power thanks to its combined cycle technology.

The project is being designed, built and operated by ContourGlobal, a US-based leading power projects developer.

“ContourGlobal and OPIC have a strong history of partnership underpinned by results, and Cap des Biches is a milestone project both for OPIC and our support to President Obama’s Power Africa initiative,” said Elizabeth Littlefield, OPIC’s President and CEO.

“This is the first power sector transaction of any size for OPIC in Senegal and I look forward to its transformative effect on Senegal’s infrastructure and economic growth. It’s also an important step for OPIC’s energy presence in West Africa, an exciting region with tremendous development opportunity,” she said.

Electricity is a development imperative and a prerequisite for sustained economic growth.

It is estimated that Senegal must generate an additional 130 megawatts to meet its current needs.

Once operational, the Cap des Biches project will play a significant role in helping to meet the 5-8% annual growth in demand for electricity.

SENELEC, Senegal’s national electricity utility, will be the off-taker for the power generated by the project.

“Cap des Biches is an important project for Senegal’s power sector that will have a strong impact in providing much needed power to help sustain the country’s economic growth and implement Senegal’s Emerging Plan”, said Bertrand de la Borde, IFC Director for Infrastructure in Africa.

“This is the fourth power plant that IFC has financed in Senegal, demonstrating our long-term commitment to the energy sector,” he added.

The Cap des Biches project is OPIC’s first financing of a utility-scale power project in Senegal, and helps fulfill the US development finance institution’s key role to carry out President Obama’s Power Africa initiative, which aims to add 60 million new electricity connections and 30,000 new megawatts in Sub-Saharan Africa.

Earlier this year, OPIC surpassed its initial $1.5bn pledge to private sector-led power projects under Power Africa, a total that included Cap des Biches.

OPIC and ContourGlobal have previously partnered for important African power developments in Togo and Nigeria.

Construction of the project has already started and is expected to be completed in May 2016.