Proparco has announced a €34.5m loan with an 18-year maturity to finance the construction and operation of the Senergy solar project, a photovoltaic solar power plant in Senegal.

Proparco is the project’s main funder and the only debt lender.

This project combines the expertise of three French energy specialists: the Meridiam investment fund, the French manufacturer specialized in solar energy, Solairedirect (Engie), and Schneider Electric.

It will develop energy provision in Senegal with a lower generation cost, while reducing greenhouse gas emissions.

It marks the first stage in the country materializing the commitments it made at COP21 in December 2015.

Since early 2015, the Senergy solar project has been developed by the investment company Meridiam, in partnership with Solairedirect, as well as with the project’s initial shareholders, the Senegal Strategic Sovereign Investment Fund (FONSIS) and Senergy SUARL, a Senegalese company which develops energy projects.

Meridiam, an experienced investment manager in infrastructure with a portfolio under management of €5bn, set its sights on Africa in 2014 with the creation of the Meridiam Infrastructure Africa Fund.

It has partnered with Solairedirect, a forerunner in the development of solar energy in France, to develop and cofinance projects in Africa.

Under this project, Solairedirect will be responsible for building the power plant and Schneider Electric will supply the inverters and transformers.

The commissioning of the new Senergy power plant will contribute to achieving the Government’s Emerging Senegal Plan, which provides for a significant strengthening of power generation capacity.

The project will also initiate the momentum towards diversifying Senegal’s energy mix.

It is currently largely based on fossil fuels, which account for 90% of the mix.

In addition, it will reduce annual greenhouse gas emissions by 34,000 teq C02, and will thereby contribute to the implementation of the commitments made by Senegal at COP21.

Sub-Saharan Africa has one of the highest potentials for solar energy generation in the world.

The significant reduction in the equipment costs in recent years is conducive to its development in Africa.

However, investments continue to be largely insufficient to achieve this potential.

Access to long-term financing is essential in order to cover the significant initial equity requirements.

Proparco provides a response by offering private developers long-term debt and equity financing: it has longstanding experience in financing renewable energies and is one of the first financial institutions to support these new energies in Africa.