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The European Investment Bank (EIB) has announced that it has approved financing for the 420 MW Nachtigal hydropower project in Cameroon, which has an estimated total cost of EUR1.17 billion (US$1.35 billion).
The project consists of the development, construction and operation of a hydroelectric dam and 420 MW power plant, comprised of seven 60 MW turbines, to be located on the central course of the Sanaga river, 65 km northeast of Yaoundé, the capital city.
The project is majority-owned by EDF, with the International Finance Corporation (IFC) and the Cameroon state as supporting shareholders. In August, Belgian construction group BESIX was awarded the design-build contract, which covers the 2km long and up to 14m high dam, a 3km supply canal and the civil engineering works of the power plant and water intake facilities.
Construction will begin before the end of the year and is expected to last 57 months, meaning that the project will commence operations in 2023. The dam will increase Cameroon's electricity generating capacity by 30%.
The approved EIB financing amounts to EUR50 million (US$57.9 million). It adds to a EUR150 million (US$174.0 million) loan from the African Development Bank (AfDB) secured in November 2017 and a US$794.5 million package approved by the World Bank in July this year.
The latter consists of US$300 million guarantees from the International Bank for Reconstruction and Development (IBRD), US$262.5 million guarantees from the Multilateral Investment Guarantee Agency (MIGA), US$70 million equity, US$152 million loans and currency risk management swaps from the IFC.
The EIB financing was approved at the EIB Board's monthly meeting last week, where around EUR1 billion (US$1.16 billion) was approved for investment in new energy projects. Alongside the Nachtigal project, these funds will support a 42 MW solar portfolio in Poland, two 500 MW solar schemes in Morocco, a cross-border interconnector between Mali and Guinea and renovation of electricity distribution across Greece.