Senegalese President, Abdoulaye Wade, on Tuesday in Sangalkam, Senegal, inaugurated a CFAF 45 billion Kounoune power plant financed by the Bank Group and other development partners such as the International Finance Corporation (SFI), PROPARCO, the West African Development Bank (BOAD) and the West African Banking Corporation (CBAO). The International Development Association (IDA) provided a partial risk guarantee and the Moroccan Bank for External Trade Capital (BMCE) served as a commercial broker.
With a capacity of 67.5 megawatts, the power plant is expected to increase electricity production capacity by 13% and will enable SENELEC, Senegal's power supply corporation, to provide electricity to more than 20,000 homes in the country.
The Kounoune power plant is the first infrastructure project carried out by private sectors players - Misubishi-Matelec - based on the "Build, Own, Operate" (BOO).
After the Kounoune power plant, SENELEC will establish an investment programme estimated at CFAF 520 billion for the period 2007-2015. From November 2008, the Kahone-2 power plant with a capacity of 60MW will be operational.
The new infrastructure will make it possible to significantly reduce power cuts that have hit the country in recent times.
Speaking on the occasion, President Wade said the Kounoune power plant was a classic example of a successful public-private partnership. He called on private donors to participate in Senegal's development. Senegal, he said, had all the necessary conditions for private capital investment in his country.
He said the Kounoune power plant was among the major projects of the partnership and was a major step in the implementation of an ambitious investment plan undertaken to upgrade basic infrastructure in general and power-generating infrastructure in particular.
He stressed that Senegal, like other non oil producing countries, had felt the severe oil crisis resulting from long-lasting high oil prices. This situation, he said, had resulted in major constraints that were negatively impacting the country's development objective, especially the energy sector.
To deal with the situation, Mr. Wade said, he had decided to re-orientate the country's energy policy and had, at the same time, given directives for the implementation of appropriate measures which will help cushion the effects of the crisis on the population.
According to the Senegalese president, there is a diversification of production sources through the use of carbon as a source of energy, the promotion of new and renewable sources of energy with special emphasis on biofuels, solar energy, wind and water energy.
He stressed that the rapid electrification of rural areas with the objective of attaining 50% of rural households by 2012, the intensification of oil prospection, the current use of existing fossil fuels, the maintenance and reinforcement of refining facilities and stocking capacity as well as the development of a policy that will help cut down energy consumption were part of the objectives he had set for himself and which should be attained before the end of his tenure.
President Wade said it was necessary to carry out a campaign aimed at saving energy as it is being done in developed countries during periods of energy crisis.
With regard to measures aimed at mitigating the crisis caused by escalating oil prices, the government of Senegal has provided consumers with more than CFAF 200 billion over five years through SAR and SENELEC which are the country's energy corporation as subventions for butane and electricity.
This underscores the need to put in place the necessary mechanisms to ensure that the Senegalese economy is less vulnerable to oil shocks, the Senegalese leader said.
The conditions for such investment, he stressed, included security, stability and investment guarantee. Senegal's electricity production has, over the last seven years, increased by 160 MW, equivalent to a CFAF 80 billion investment which has enabled the country to acquire newer and more energy-efficient electricity production units.
The event brought together senior government officials, a representative of the Islamic Development Bank, local authorities and representatives of communities benefiting from the project. The Bank Group was represented by its Resident Representative in Senegal, Mohamed H'Midouche.