t-Import Bank (Exim), begin by the end of 2012 in a government push to increase power output.
The Chinese state-owned bank has agreed to provide the Ivory Coast with a loan of $556 million, and has attached favourable terms to the deal, most prominently, a low-interest rate.
The funds contributed by Exim will account for the majority of financing needed to build the new hydro power station, although a small proportion of the funding will come directly from the Ivorian government. Energy director for the Ministry of Mines and Energy Sabati Cisse gave details, telling Reuters in an interview: “We’ll have Chinese financing for 85 percent of the 330 billion CFA francs through Exim Bank, and the Ivorian share will be the remaining 15 percent”.
Favourable terms granted by Exim include a 2 per cent interest rate, and a nine year grace period on the 20 year loan, Reuters reports.
It is expected that construction will begin by the end of the year, and completion of the hydro-plant will take at least five years to achieve. The power station will be located at Soubre in the Bas-Sassandra region to the south of the Ivory Coast.
Cisse added emphasis to the project’s timeline, saying: “Everything is in place. The financing has been acquired. The last signatures, those for the loan agreement, will be done in the first half of November at the latest”.
The deal comes as the Ivory Coast’s government has declared a push on energy production in response to increasing consumption. The country intends to increase its power output by 150 megawatts per year, over the next ten year period. The plan necessarily will require construction of new infrastructure, and the upgrading of existing power producing facilities. In this vein, the government has pledged at least $500 million, and has vowed to focus on finding more financing to support the country’s energy sector in its revival.
The Ivory Coast’s energy sector, is in fact, a successful and profitable sector for the West-African country. Despite enduring civil unrest spanning the first decade of the 21st century, including two years of unfettered violence which split the country in two, the Ivory Coast has managed to maintain a functioning an stable energy grid, and supplies electricity to neighbouring countries in the region including Benin, Burkina Faso, Ghana, Mali and Togo.
The country currently has an output capacity of 1,390 megawatts; however, in 2010 reports from the energy sector caused concern showing a 3.5 percent growth in consumption, highlighting the need for an expansion of energy infrastructures.
Meanwhile, China has been seen ramping up its investments in Africa over recent years, with the country – which is the second largest economy, with the highest population, in the world – financing projects across the continent in a strategy to develop ties with African countries, many of which are experiencing a boom in resource and energy outputs.