The Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution, has signed two major financing agreements for the development of energy projects in Senegal.

OPIC has committed $250m in financing and $70m in reinsurance to Lekela Power for the development, construction and operation of a 158 megawatt wind farm in Taiba N’Diaye, Senegal. 

Elizabeth L. Littlefield, OPIC President and CEO, said this is a transformative project for many reasons, principally for the new and clean energy it will supply to Senegal. 

“OPIC partnering with Lekela illustrates the opportunity for renewable resources to make a significant contribution to total energy needs. OPIC is proud to support the Taiba wind project and its role in advancing Senegal’s economic prosperity,” she said.

The project is expected to increase Senegal’s available installed power capacity by 24%. 

Senegal suffers from a chronic deficit in electricity supply with regular power rationing and blackouts that adversely affect living conditions and economic development.  

The cost of electricity in Senegal is high because nearly 90% of the electricity is currently generated using costly oil-based fossil fuel. 

This project is a critical component of Senegal’s power generation and sustainable energy growth plan, and supports the goals of the US Government’s Power Africa initiative.

“Energy is critical to the African continent and its continued growth. Lekela is uniquely positioned as a long term investor to provide clean, secure, reliable and competitive renewable energy in Senegal and across Africa” said Lekela CEO Chris Antonopoulos. 

In addition, OPIC has announced a financing agreement with ContourGlobal for the 33 megawatt expansion project at ContourGlobal’s Cap des Biches power plant in Senegal. 

OPIC has committed an additional $53m in financing and $23m in insurance, in support of the $154m project that provides efficient and reliable electricity to the Senegalese grid by adding a total of 85.9 megawatt generation capacity, a 30% increase in overall functioning capacity. 

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

“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 Littlefield.

“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.

The Cap des Biches project plays a significant role in helping to meet the 5 to 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.

The Cap des Biches project was OPIC’s first financing of a utility-scale power project in Senegal.

“We’re proud to once again be partnering with OPIC and the Government of Senegal to deliver reliable, cost-effective and much needed power to West Africa,” said Joseph C. Brandt, ContourGlobal's President and CEO. 

“The Cap des Biches project was signed at the first US - Africa Business Forum in Washington D.C. in 2014. Both the initial project and the expansion were constructed and placed into operations in record time, highlighting the effectiveness of OPIC and Power Africa in mobilizing private capital to critical energy projects and the urgency with which Senegal under President Mackey Sall is addressing the current electricity deficit. We look forward to continued successes with OPIC to ensure that other much needed African infrastructure projects become a reality,” he said.

Both agreements were announced at the sidelines of the US – Africa Business Forum in New York City.