The Emerging Africa Infrastructure Fund (EAIF) has invested $25m in a new company set up in Sierra Leone by a private sector joint venture to build a 57MW, oil-fired, power station at Freetown.

With a total investment of $148m, the CECA SL development will benefit from a $25m loan from the EAIF.

In tandem with providing debt for a 14-year term, EAIF acted as structuring bank alongside the International Finance Cooperation (IFC) as mandated lead arranger. 

Other financial partners included the World Bank, which provided a political risk guarantee for the project; the Dutch development bank FMO, CDC and the African Development Bank.

Emilio Cattaneo, Executive Director of EAIF, said that the project finance announcement marks an era of renewed confidence in Sierra Leone and is a signal to the world that the country is moving forward and welcomes international investment.

“Reliable power is the oxygen of economic development and this project will not only improve business conditions and the lives of families across Freetown, but also help bring new self-confidence and optimism to Sierra Leone,” he said.

Sierra Leone’s economic development was hampered by the Ebola epidemic and creating the conditions for sustained development is of the highest national priority.  

The country has one of the world’s lowest levels of electrification.

It is estimated that less than 10% of the population currently has access to the electricity grid.

Freetown, which has a population approaching 1 million people, will see the available electricity generating capacity increased by an average of 130% when the power station is complete.

Over 80% of businesses presently rely on their own diesel-fuelled generators. 

Business leaders say the lack of reliable power is one of the single biggest constraints on growth.

In addition to construction of the main power plant, the project also involves building a new substation, work to the grid and a 2.5km fuel pipeline. 

The plant will be build by 200 construction and 42 permanent jobs will be created. 

EAIF is managed by Investec Asset Management, one of the largest third party investors in private equity, credit, public equity and sovereign debt across the African continent.

Nazmeera Moola, Head of EAIF at Investec Asset Management, said:

“EAIF is often a pioneer investor in projects in fragile states recovering from natural disaster or conflict. Sierra Leone is a country of great economic potential and the leadership of CECA SL is to be congratulated for its enterprise and vision.”

CECA SL Generation Limited is a joint venture company set up by TCQ Power and Globeleq. 

Both companies have substantial experience in Africa and operate established businesses. 

Karim Nasser, Director CECA SL, said: “We greatly value the expertise and tenacity that EAIF and Investec have brought to our venture. They have helped us resolve many complex issues. We now look forward to beginning the construction phase and opening the plant for business.”