EIB Set to Back 50 Million-Euro Loan for Liberian Hydropower
The European Investment Bank is close to approving a 50 million-euro ($64 million) loan for Liberia’s Mount Coffee hydropower project and may provide 100 million euros for a similar power plant in East Africa.
The financing would be part of as much as 1 billion euros worth of loans the Luxembourg-based bank is considering in sub- Saharan Africa, Vice President Pim van Ballekom said in a Nov. 21 interview in the Ethiopian capital, Addis Ababa. The deal for the 64-megawatt Liberian project, which will cost 180 million euros, may be approved this year, he said.
“The project is identified as being a very important element in regional integration, and supporting a post-conflict country,” van Ballekom said.
The West African nation is seeking to rebuild infrastructure destroyed in civil wars between 1989 and 2003. The country produces 23 megawatts of electricity for a population of 4.1 million people, one of the lowest per capita rates in the world, according to Liberia’s finance ministry.
The European Union’s lending unit, which loans as much as 70 billion euros a year, is planning to give 100 million euros for generation and transmission infrastructure to the 147- megawatt Ruzizi III hydropower dam. The project, expected to cost 300 million euros, will be situated on the Ruzizi River at the intersection of the borders of Rwanda, Burundi and the Democratic Republic of Congo.
“If we can stimulate regional cooperation, it’s an extra, certainly when it’s in the Great Lakes district,” van Ballekom said. Sithe Global Power LLP unit, which is owned by private- equity company Blackstone Group LP (BX), will work on the project, he said.
Africa has 15 percent of the world’s population and accounts for 3 percent of energy consumption, according to a 2011 report by the African Union and other continental organizations that studied electricity demand for the next three decades. It is projected to grow at a rate of 5.7 percent annually from the present 2.4 percent, it said.
The bank made “a convincing argument” why it’s important for African nations to invest in renewable energy in discussions with ministers at an energy conference in Addis Ababa last week, van Ballekom said.
“It’s always good to have a broad energy base so you’re not dependent on certain countries or regimes you don’t like to be over-dependent on,” he said.
African nations also need to attract more private investors by improving legal systems to attract the estimated 30 billion euros a year the continent needs for energy investment, van Ballekom said. “You can’t realize that with donors and grants and public institutions,” he said. “Without the private sector, it remains a challenge for decades to come.”
The EIB this month signed a deal to loan 50 million euros to the Khi Solar One project in South Africa. The project is co- owned by companies including Abengoa SA (ABG), a Spanish renewable- energy and engineering company, and South Africa’s state-owned Industrial Development Corp., according to the EIB’s website.
European Union countries are expected to give the EIB about 10 billion euros by March 31, providing it with about 190 billion euros to lend over the next three years, according to van Ballekom. About 10 percent of that will be invested outside Europe and a quarter of it in the future may be reserved for climate-related projects, he said.
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