Mali signs €52million deal for first West African utility-scale solar plant

July 10, 2015 | Budget & Investment, Solar, West Africa

London, UK | – A historic build, own and operate agreement signed on Friday between Norwegian company Scatec Solar (SSO), the Malian Ministry of Energy and Malian electricity utility Water and Electricité du Mali (EDM) will see the construction of West Africa’s first utility-scale solar power plant, near the ancient city of Segou, in south-east Mali.

The 33 MW, €52-million facility, which would be developed in partnership with the International Finance Corporation’s (IFC’s) global infrastructure project development fund InfraVentures and local developer Africa Power 1, was expected to generate 60 000 MWh/y of electricity, representing 5% of Mali’s total electricity consumption and equal to the electricity consumption of 60,000 households.

The ground-mounted photovoltaic (PV) solar plant would use around 130 000 PV modules on a fixed tilt system and would connect to an existing transmission line. Some 45% of the total project cost would be funded through senior project finance debt, with IFC InfraVentures arranging the debt for €23-million.

The project had also been granted a concessional loan from the Climate Investment Fund’s Scaling Up Renewable Energy in Low-Income Countries Programme, which would cover 30% of the capital expenditure. The remaining 25% would be provided as equity by the project partners, with financial close of the project expected before the end of this year.

Friday’s agreements included a power purchase agreement (PPA) between EDM and Segou Solaire SA, the local project company controlled by SSO, for the delivery of solar power over the next 25 years. The PPA was complemented by a concession contract through which the government of Mali had granted Segou Solaire the licence to operate.

SSO, which would build the plant and provide operation and maintenance services once it was connected to the grid, would own 50% of the power plant, while IFC InfraVentures would have a 32.5% stake and Africa Power 1 17.5%. Some 200 local jobs would be created during the development phase.

Speaking at the signing ceremony, Malian Energy and Water Minister Mamadou Frankaly Keita said the landmark deal signalled the government’s commitment to meeting the nation’s growing energy demand and providing clean, renewable and affordable energy to its citizens. IFC InfraVentures global head Alain Ebobisse added that one of the pillars of the World Bank’s Country Assistance Strategy for Mali was to increase access to energy – a development fundamental.

“IFC InfraVentures’ partnership with SSO and Africa Power 1 helps advance this strategy…[in combination with] a series of renewable-energy projects we are developing in the country,” he commented. SSO CEO Raymond Carlsen said the project was “another great milestone” for the group on the continent. “After several years of development efforts in the region, we can now move forward with the first utility-scale solar plant in West Africa.

The Malian authorities have demonstrated decisive will to tackle the nagging issue of power supply,” he said. Africa Power 1 chairperson and SSO West Africa general administrator Dr Ibrahim Togola, meanwhile, described the signing event as “historic”. “Mali now becomes the first country to install the largest solar grid-connected power plant in the region. This high-profile joint venture in which Malian citizens participate will serve as a model to launch the solar era in West Africa,” he asserted.