96880 PUBLIC-PRIVATE PARTNERSHIPS BRIEFS Cameroon: Kribi Power Plant Overview In 2009, the Government of Cameroon awarded the Kribi Power Development Corporation (KPDC), a special purpose vehicle set up and owned by AES Corp. and the government, a 20-year public-private partnership (PPP) to design, build, finance, and operate the 216 MW Kribi natural gas-fired power plant and associated transmission line. It is Cameroon’s second Independent Power Plant (after Dibamba HFO 88 MW, financed in 2010). Although Cameroon has a planned expansion of hydropower capacity of 6000 MW, crucial projects were not expected to come online until after 2017. In this context, Kribi provided a low- cost gas-fueled option to increase reliability. In 2012, IFC invested in KPDC with a financ- ing package comprising direct and parallel loans, and the World Bank Group provided a partial risk guarantee to facilitate Cameroon’s first long-term, local currency loan for infrastructure. In 2014, upon the acquisition of AES’ shares by Globeleq, MIGA extended a guarantee to cover an equity investment by Actis Energy Generation Holdings N.V., made through its subsidiary, Globeleq Energy Holdings (Cameroon) in KPDC. This guarantee was made for eight years, against the risks of transfer restriction, war and civil disturbance, and breach of contract. This series showcases how the World Bank Group supports the development and implementation of public-private partnerships. This support comes in the form of public sector loans, private sector finance, sector and transaction advice, guarantees, and output-based aid. PUBLIC-PRIVATE PARTNERSHIPS - APRIL 2015 Background $182 million debt financing package to KPDC. The syndicated loan has been mobilized from The Kribi Power Project began construction in 2010 development finance institutions including the African and started supplying electricity in March 2013. The Development Bank, European Investment Bank, project provides short-term relief to the hydropower- Netherlands Development Finance Company (FMO), dependent country by providing electricity to 163,000 the French Promotion and Investment Company households. As the largest Independent Power Plant for Economic Cooperation (PROPARCO), and the (IPP) in Cameroon, the project is considered an Central African Development Bank (BDEAC), which important step toward diversifying power generation together provide about 61 percent of project debt sources in the country, while monetizing gas resources. through parallel loans. The financing closed in early 2012. Project Description The World Bank provided a partial risk guarantee to The Kribi power project—the first power plant allow local commercial banks to provide extended to run on natural gas in Cameroon—involves the tenors for their $84 million financing, in order to development, construction, and operation of a new match project needs, and backstop certain obligations 216 MW gas-fired power plant located near the of the government under its commitment agreement Mpolongwe village, nine kilometers north of the (including some termination and liquidity agree- coastal city of Kribi in South Province of Cameroon. ments). This guarantee assisted in raising much needed The project also includes the construction (with local financing and helped deepen the domestic substations and transformers) of a new 100-kilometer financial sector. 225-kilovolt double-circuit transmission line between In 2014, MIGA issued a guarantee of $78.2 million the Kribi power plant and the existing Mangombe supporting the equity investment made by Globeleq 225/90-kV substation at Edéa in Littoral Province. Energy Holdings (Cameroon) in KPDC against Natural gas is supplied from the offshore Sanaga breach of contract. South gas field in Cameroon, developed by Perenco Cameroon through an 18-kilometer onshore gas Outcomes pipeline developed by the National Hydrocarbons By filling a temporary gap in power generation Company (SNH). Electricity generated from the capacity until Cameroon’s flagship hydropower project will be transmitted into Cameroon’s Southern projects go live around 2017, the Kribi power plant Interconnected Grid. is providing short-term generation capacity and The project was implemented as a PPP between enabling the power generation diversification strategy the government and KPDC, which is owned 44 of Cameroon. and 56 percent by the government and AES Corp. The pioneering project is the first gas-to-power PPP (now owned by Globeleq Africa) respectively. AES being implemented in Cameroon and in the Central Sonel (now ENEO) is the sole off-taker of the power African region under a traditional project finance produced. structure. Its success will pave the way for the country to make significant public investments as well as to World Bank Group Role mobilize private sector investment. IFC, the World Bank, and MIGA supported this project in the following ways: IFC provided a direct loan of $86 million and acted as the lead arranger and global coordinator of a Photo Credits Front: Bilfinger/Creative Commons license, creativecommons.org/licenses/by-nd/2.0/ worldbank.org/ppp @WBG_PPP scribd.com/wbg_ppp