Working together to light the way for renewable energy in Chad
9th Aug 2018
N’Djamena, Chad: Power Purchase Agreement (PPA) signed with the Government of Chad for the 60MWp Djermaya Solar project.
The Djermaya Solar project, represented by InfraCo Africa its majority shareholder, today signed a 25-year PPA with the Ministry of Energy and the national utility, La Société Nationale d’Electricité (SNE). The PPA marks a key milestone in the development of Djermaya Solar, enabling the project to raise construction financing and demonstrating the joint commitment of all parties to developing renewable energy in Chad.
Chad relies upon expensive heavy fuel oil and diesel for electricity, making the country vulnerable to supply failures and global price fluctuations. Djermaya Solar is one of the first solar IPP projects in Chad. This pioneering project will be delivered in two phases of 32MWp and 28MWp, gradually integrating renewable power into Chad’s national grid. Development of the project is being led on the ground by Aldwych Africa Development Limited (AADL, on behalf of InfraCo Africa) and Smart Energies.
Hugues Antoine Guinoiseau, Director of Smart Energies International, said:
‘This PPA marks the beginning of a long collaboration between a consortium led by Smart Energies and InfraCo Africa, the SNE and the Chadian government. The energy needs are very important in Chad – needs mostly satisfied today by polluting energies. In a country with strong sunlight like Chad, solar energy appears as a great means to expand access to a clean energy. We are happy to contribute to its deployment in Chad. This project also validates Smart Energies’ internationalisation strategy, which has already developed strategic positions in several frontier markets and developing countries, on the African continent, in the Middle East and in Eastern Europe.’
InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), has committed US$3m to the development of Djermaya Solar and leveraged US$0.8m in grants from its sister PIDG company, the Technical Assistance Facility (TAF). Amongst other activities, the TAF grant has funded legal advice for the Government of Chad (GoC) to support preparation and negotiation of project documents such as the PPA. Djermaya Solar has also secured a €6.35m commitment from the EU-Africa Infrastructure Trust Fund (EU-AITF) to build a transmission line and substation to connect Djermaya Solar to the grid.
Speaking at the signing, InfraCo Africa’s Head of West Africa Business Development, Kodjo Afidegnon said:
‘We are excited to be working with our partners at the forefront of renewable energy in Chad. InfraCo Africa is uniquely able to fund high-risk projects in the earliest stages of their development so that they can complete activities, such as negotiating bankable PPAs, which are necessary to mobilise private sector investment. Working with our sister PIDG companies, Djermaya Solar demonstrates our commitment to investing into challenging markets, both here and across West Africa.’
The project draws on the expertise of a range of government ministries, SNE, Agence des Energies Renouvelables au Tchad (ADER – Tchad) as well as the project company. Together they have worked to build awareness of the project and negotiate the necessary legal and regulatory frameworks to make it a success. With the Environment and Social Impact Assessment (ESIA) expected to be concluded imminently, and the African Development Bank confirmed as mandated lead arranger for the project, the first 32MWp phase of the project is on track to start delivering power in 2020.
The Minister of Petroleum and Energy, Michel Boukar, explained during the signing:
‘The Djermaya Solar project is important to us because it will help to increase electricity access in our country but also reduce our greenhouse gas emissions, both being strategic goals for the Government of Chad’
Lighting the way for renewables in Chad
The Djermaya Solar project will develop 60MW of solar PV in two phases, gradually integrating renewable power into Chad’s national grid. By establishing a cross-sector Task-Force, this project is drawing on both public and private sector expertise to rapidly develop a solution that is bankable and aligned with the Government of Chad’s aspirations.