IFC InfraVentures, an infrastructure project development fund, and Scatec Solar, an integrated independent power producer, will develop the $55m Scatec Segou solar power project in Mali with a local developer, Africa Power 1.

IFC will invest $12.5m for its own account in addition to $2.5m already spent for a 20% equity stake in the project company and mobilize parallel loans of up to $15.2m.

Scatec Solar will own 50% of the power plant and World Bank’s project development fund, IFC InfraVentures will hold 32.5%, while Africa Power 1 will hold 17.5%.

Paul Noumba Um, World Bank Country Director for Mali, said that one of the pillars of the World Bank’s Country Assistance Strategy for Mali is to increase access to energy, a development fundamental.

“IFC InfraVentures’ partnership with Scatec Solar and Africa Power 1 helps advance this strategy through Scatec Segou. We believe that this project can have a strong demonstration effect and pave the way for a series of renewable energy projects in the country,” he said.

The Scatec Segou solar project comprises the development, construction and financing of a 33 megawatt greenfield solar photovoltaic power project located in Segou, 240 kilometers from Bamako.

Scatec Solar will construct the plant, and in addition provide operation and maintenance services after the plant is connected to the grid.

Scatec Solar has also signed a Power Purchase Agreement (PPP) with the Malian Ministry of Energy and Water and Electricité du Mali (EDM), the electricity utility of Mal, for the delivery of solar power over the next 25 years.

The PPA with the utility is complemented by a Concession Contract with the Government of Mali, granting license to Segou Solaire, the local project company controlled by Scatec Solar, to operate.

The Malian Minister of Energy and Water, Mamadou Frankaly Keita, said: “This landmark agreement signals the Government’s commitment to meet the nation’s growing energy demand and to provide clean, renewable and affordable energy to our people.”

Mali now becomes the first country to install the largest solar grid-connected power plant in the region.
The project is expected to increase the renewable energy component of Mali’s power supply, helping to advance the country’s ambitions energy development goals.

Recent years have seen a marked growth in investor interest in African infrastructure projects, however, not enough projects are sufficiently bankable to absorb the funding available.

IFC InfraVentures’ investment in the development of the Scatec Segou project is part of wide-ranging efforts to address the continent’s gap in project development by providing early stage risk capital to create commercially viable initiatives that can rapidly achieve financial close.

Mamadou Igor Diarra, Mali’s Minister of Finance, said: “Although Mali has recently experienced some significant challenges, we still have very ambitious plans to attract investors. This project represents an important milestone in developing the energy sector to help strengthen our economy.”

Several other IFC InfraVentures-supported projects are expected to achieve financial close in the near future.