African Export-Import Bank (Afreximbank) and Senegalese power company Ndar Energies have signed a framework agreement to finance the development of a 250-megawatt combined cycle gas turbine power plant and gas pipeline in Saint Louis, Senegal.

The agreement was signed on the margins of the 2nd Dakar Finance Summit in Dakar. Afreximbank and Ndar Energies will finance the development, design, construction and operation of the power plant and pipeline. Total capex for the project is €430 million (US$455 million).

The agreement also appoints Afreximbank as the lead project developer and mandated lead arranger, to take the lead in the provision of project preparatory services and in syndicating the debt raise.

Through the investment, Afreximbank is supporting power generation diversification, enhancing system resilience and contributing to lower electricity prices with a lower carbon footprint than the prevailing alternatives. The project, which possesses strong climate finance credentials, is in line with the bank’s strategy to support the deployment of just energy transition solutions across Africa.

Wholly owned by Senegalese entrepreneurs, the project supports the diversification of the country’s energy matrix, and an increase in access to reliable and affordable power, a critical component of the country’s long-term competitiveness and sustainable economic growth. By providing baseload power generation, it will also help displace the use of prohibitively priced heavy fuel oil and diesel-fired generation.

"Afreximbank’s support will help strengthen Ndar Energies’ capabilities and rapidly bring this project to the market," says Baidy Agne, chairman of Ndar Energies. "This project represents a significant part of the country’s national electricity plan, which envisions to position Senegal as an energy hub for West Africa.”