Africa-focused Infrastructure investment platform Africa50 has signed a memorandum of understanding (MoU) to structure and mobilize financing to expand gas-fired generation in the Republic of Congo.
The MoU involves expanding Centrale Electrique du Congo’s (CEC) gas-fired thermal power plant (TPP) from the current 300 MW to 450 MW and eventually 900 MW.
Africa50 CEO Alain Ebobisse said the infrastructure platform was committed to expanding Congo’s generating capacity, although he did not say how much investment was required to expand capacity in the first instance to 450 MW
“At a later stage, Africa50 may invest in the project along with its partners, including other development finance institutions [DFIs] and private lenders,” he said.
CEC is 80%-owned by the Congolese government, while Italy’s Eni, which opened the TPP in 2010, holds 20%.
Africa50 mobilises funds from African countries, international financial institutions, institutional pension and sovereign wealth funds, insurance firms and other private sector entities.
It operates as commercial financial institution seeking to provide an attractive return to investors.
CEC’s 300-MW TPP uses gas from the M’Boundi field. The plant’s output averaged 30 MW in 2010 and electricity production has increased over time.
Africa50’s capital stands at US$800 million, with US$700 million of initial capital subscriptions from 20 African countries and the African Development Bank. The capital is expected to reach US$1 billion and the medium-term target is $3 billion.
Congo President Denis Sassou Nguesso, who commended Africa50’s engagement, said he viewed the CEC expansion project as a priority as it would foster trade and economic development in the country.
“We are pleased to see African experts coming back to continent to join institutions such as Africa50 that can drive transformational change envisioned in African Union (AU) agenda,” he said during the signing of the MoU.
Nguesso laid the foundation stone of CEC’s plant in May 2008. Expansion to 450 MW would require a third 150-MW turbine.