MoU signed for US$1 billion renewable projects in West Africa
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Multinational renewables developer Gigawatt Global Cooperatief has signed a Memorandum of Understanding with the Economic Community of West African States (ECOWAS) to invest US$1 billion in renewable energy projects in the region.
Gigawatt Global have committed to financing and installing 800 MW of solar and wind farms in ECOWAS member states, including Burkina Faso, Senegal, Mali, Nigeria and the Gambia. The company plans to begin feasibility studies, training and securing power purchase agreements in early 2019.
The project will be funded by the US Agency for International Development's Power Africa initiative, set up under former President Barack Obama’s administration in 2013, with a planned 70:30 debt to equity ratio.
Although Power Africa is intended to be the main source of debt finance, the developers are reportedly hoping to involve other development banks and investors. This may be crucial to the success of the project, given that current US President Donald Trump is highly critical of foreign aid and international development spending.
ECOWAS' participation in the project will be led by its unit, the West Africa Power Pool, which has the wider goal of creating a regional electricity system.
The region - with a total population in excess of 340 million - has one of the lowest modern electricity consumption rates in the world. Electricity access rates (World Bank 2016) vary from below 20% in Liberia, Niger and Burkina Faso to more than 60% in Senegal and around 80% in Ghana. For the ECOWAS region as a whole, only 19% of the rural population has access to electricity, emphasizing the necessity for a project such as this.
Many of the ECOWAS states are within the Sahel region (the transition zone between the Sahara desert and the Sudanian Savanna), which is set to benefit from a similar project spearheaded by the African Development Bank (AfDB). Alongside partners the Green Climate Fund (GCF) and the Africa50 investment fund, the bank aims to install 10,000 MW of solar power across the region through the Desert to Power program.
