The World Bank's Multilateral Investment Guarantee Agency (MIGA) has donated a gigantic amount of USD 188 million in guarantees from the IBRD to Nachtigal Hydropower project.
Located on the Sagana River about 65 kilometer north-east of Yaoundé, the Nachtigal Hydropower project is a 420 megawatt hydropower plant, which is being developed on a build, own, operate and transfer basis under a 35-year concession agreement between the project company and the Republic of Cameroon. The power purchase agreement exists between the company and Energy of Cameroon (ENEO), a privately-owned electricity distribution company.
According to Construction Review Online, MIGA has given breach of contract for up to 15 years to French power developer and operator EDF International, as well as STOA, a French infrastructure investment vehicle that focuses primarily on Africa. The Nachtigal Hydropower project is said to be linked with to the Southern interconnected grid that represents around 94 percent of Cameroon's national electricity consumption.
One the project is accomplished, it will strengthen Cameroon's overall energy production and contribute an additional 30 percent of installed generation capacity everywhere together with significant climate co-benefits. The project will also sell power to ENEO at a rate of US $0.070, among the lowest tariffs for a hydropower plant.
"As a project in an IDA-eligible country, as well as one with significant climate change mitigation benefits, I am pleased this project has mechanisms to help address environmental and social concerns, which are of utmost importance to MIGA," MIGA Executive VP and COO Keiko Honda.