FMO and Other Financiers Provides Loan for Four Solar Plants in Burkina Faso

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Dutch entrepreneurial development bank, FMO has announced its participation in the construction of four solar power plants in Burkina Faso. The bank will be funding a total amount of €90 million consisting of four loans for these solar projects with a combined capacity of 110MWp.

The solar plants will be set up at Nagréongo in Oubritenga Province, Kodeni (near Bobo-Dioulasso) in Houet Province, Tenkodogo in Boulgou Province, and Dédougou in Mouhoun Province. Three of these four projects have been signed, while the signing of the fourth project is in progress.

The first three projects are partially financed through the Access to Energy Fund, a joint initiative of FMO and the Dutch government, whereas the fourth is partially financed by the Building Prospects Fund, the FMO-Dutch government fund for private investments in infrastructure in developing countries.

Other financial facilities include €21 million funds from the Interact Climate Change Facility (syndication between AFD, the EIB, and EDFIs) and another €15 million from AFD’s subsidiary Proparco. The financing round exemplifies the Team Europe approach, allowing the European Union to enhance coordination and work better among its member countries.

The special purpose company, SPES de Ouagadougou (95% owned by GreenYellow, the French Casino Group subsidiary, and 5% by Africa Energy Company) is constructing the 30 MWp solar plant in Nagréongo. The 24 MWp Tenkodogo plant will be completed by Quadran Burkina Faso S. A., which is 30% owned by Syscom Network and 70% owned by MIHIA Holding. 

MIHIA Holding and Syscom Network have also invested in the development of the solar power plant in Dédougou, with an expected capacity of 18 MWp. The largest among the four solar plants is the 38MWp Kodeni solar power station being developed by Africa Ren Invest Limited, which will be 60% owned by Metier Sustainable Capital and 40% by FMO.

The solar power plants are financed under a 25-year PPA between the government and the developers, and the electricity produced by these facilities will be sold to the state-owned electric company SONABEL.

Burkina Faso is one of the under-developed countries in the world, with only 20% of people having access to electricity. About 85% of the country’s grid is powered by diesel generators, with the fuel imported from Ghana and Ivory Coast. Such dependence on fossil fuels and electricity imports results in higher electricity costs.

These solar projects are being developed by independent power producers in order to increase the installed capacity of Burkina Faso which currently has a total installed capacity of 344 MW. The government has high ambitions to develop endogenous sources of electricity and substantially increase electrification, now relying on solar power to turn the tide.

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