Electricité de France (EDF) and its partners are set to move ahead with the construction of the 420MW Nachtigal hydropower plant in Cameroon.
In this regard, the French electric utility has signed final and binding agreements for the construction of the Nachtigal hydropower plant with its partners – International Finance Corporation (IFC), a member of the World Bank Group, and the Cameroon government.
Expected to cost is €1.2bn, the new Cameroon hydropower project will feature seven generating units. It will be built on the Sanaga River near the Nachtigal Falls, located 65km to the north-east of Yaoundé.
Construction of the project is slated to commence by the end of this year once the financial closing is done. The hydropower project is expected to create up to 1,500 direct jobs during peak construction phases.
In August, Belgian firm BESIX was given a contract to design and build the hydropower project.
The Nachtigal hydropower plant is targeted to be commissioned in 2023 and is expected to operate for 35 years. Nachtigal Hydro Power Company (NHPC), which is jointly owned by EDF (40%), IFC (30%) and Cameroon (30%), will own and operate the project.
As per the plan for the Nachtigal hydropower plant, a 50km power transmission line will also be built.
The new hydropower project is expected to improve the reliability of Cameroon’s power system. Its estimated power generation of nearly 3TWh per annum is likely to cover 30% of the country’s demand for electricity, said EDF.
The electricity produced from the Nachtigal hydropower project will be bought by the grid operator under a power purchase agreement at a competitive tariff.
While EDF, IFC and Cameroon will cover 25% of the project cost. The remaining amount will be financed by 11 development finance institutions and four local commercial banks, all mobilized by IFC to provide an additional €806m.
IFC said that it will invest €60m directly in equity in the project and also lend up to €110m for its own account.
EDF chairman and CEO Jean-Bernard Lévy said: “EDF is proud that the state Cameroun has recognized EDF’s expertise as a standard-bearer hydropower company by entrusting us with this low-carbon project that is low-carbon, key to the country’s development and compliant with the highest standards of social and environmental responsibility.
“The signing of these agreements will strengthen the Group’s position in Africa, a continent where we have been active for more than 50 years and which is of strategic importance for expanding our business.”