BGFI Bank Provides €11 Million Guarantee for 30 MW Solar Plants in North Cameroon

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BGFI Bank Cameroon recently confirmed to provide a bank guarantee of 11 Million Euro for setting up two modular solar power plants in the cities of Maroua and Guider, as a part of strengthening the energy supply in Cameroon’s national grid.

The two solar projects with individual capacities of 14.52 MWp and 15.78 MWp, will be installed by Norwegian company Scatec and help the electric-utility ENEO to supply the electricity in Adamawa, North, and Far North regions of Cameroon.

The electricity generated by Maroua and Guider solar power plants will be marketed under a power purchase agreement signed between ENEO and the special purpose company, Maroua Guider Solar Company (MGSC). In addition, the project will benefit from tax and customs exemption for 10 years, provided by the private investments’ incentives law.

The BGFI BANK’s guarantee is issued in the form of two Stand-by Letter of Credit, and it is supposed that ENEO will repay the bank later, with interest relatively lower than 3%.

The modular solar power plants are part of a hybrid project planned by ENEO and the government. Initially, the parties agreed to install a total of 30 MW of solar energy, later a 10 MW thermal energy project that is to be installed by UK’s firm Aggreko was added in Guider.

The Ministry of Water Resources and Energy said that the huge fuel expenses could be saved thanks to the 30 MW of solar power. And now, with the 10 MW of thermal power included in the project that savings will be revised downwards.

The installation of the solar power plants thought since 2018 by the ENEO, has not yet been launched as Scatec required bank guarantees to start its work. The financial backstop will help improve the electricity supply in these localities, which are often affected by outages.

Despite this solution to the financial aspects of the project, there is a possibility that plants would not be able to produce electricity by January 2022. The no-objection certificate to be issued by electricity regulatory agency ARSEL to allow the effective launch of the project and the incentives Scatec is expecting from the Ministry of Finance are considered as the reasons for the delay in the project to kick-off.

The clean energy plants connected to the nation’s power grid would help reduce the frequency of load shedding in the northern part of the country by about 98%. The outage situations are increasing in the dry season due to slowing down the production of hydroelectric plants and the dilapidated situation of the electrical installations in the regions.

Many other identical photovoltaic power plants are under development in Cameroon, with ENEO planning to implement photovoltaic plants in five other localities, namely Lagdo, Garoua, Ngaoundal, Bertoua, and Yokadouma. Two modular solar power plants in Djoum and Lomié have been already connected to the ENEO grid.

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