African Development Bank Group’s Sustainable Energy Fund for Africa approves €6 million for Desert to Power – Burkina Faso Solar Project

The African Development Bank Group (www.AfDB.org) has approved a €6 million concessional financing package from the Sustainable Energy Facility for Africa (SEFA), a dedicated multi-donor fund managed by the Bank, to accelerate the completion of a project for Burkina Faso Dédougou photovoltaic solar project supporting the Bank’s Desert-to-Power initiative (https://apo-opa.co/3XKXpwG).

The project involves the design, construction and operation of an 18-megawatt solar power plant in Dédougou, located 250 kilometers west of the capital Ouagadougou. Burkina Faso is one of five priority countries under the Desert-to-Power initiative, which aims to generate 10 gigawatts of solar energy in 11 Sahel countries by 2030, promoting socio-economic development.

The project is one of the first independent power producers (IPPs) in Burkina Faso and has secured both senior and subordinated loans, along with a 25-year power purchase agreement (PPA) with the Société Nationale d’électricité du Burkina Faso (SONABEL). However, the project faced challenges in achieving financial close due to cost escalation resulting from the Covid-19 pandemic. The SEFA Covid-19 IPP Assistance Program (SEFA Program) has played a key role in overcoming these obstacles. Through concession financing, SEFA helped restructure financial arrangements to absorb the increase in costs related to the pandemic, ensuring the viability of the project and maintaining the structure originally agreed with the Government of Burkina Faso, thus contributing to the country’s energy security.

Under the SEFA program, a soft preferential loan of EUR 2.5 million and a repayable grant of EUR 3.5 million were granted under the preferential financial instrument. SEFA’s involvement was instrumental in unlocking additional financing from Dutch entrepreneurial development bank FMO (www.FMO.nl), including subordinated and senior loans. These funds will be paid to Dédougou Solaire SARL, a project company jointly developed by QAIR (www.Qair.Energy), which is responsible for project management.

The project, which is part of the Desert-to-Power initiative, is expected to contribute to energy security, diversify the energy mix, reduce electricity costs and increase national electrification rates.

“The Dédougou Solar PV project increases renewable energy capacity in Burkina Faso in line with the goals of the Desert-to-Power initiative. By supporting projects like these, we are making tangible progress towards electrifying the Sahel, increasing energy security and improving the lives of millions of people.” said Dr. Daniel SCHROTH, Director of the Department of Renewable Energy and Energy Efficiency at the African Development Bank.

“Abdoulaye Toure, Chief Financial Officer at Qair Africa, expressed his appreciation for SEFA’s support and the project’s progress: “We are pleased with SEFA’s approval and thank the African Development Bank for supporting the project. This allows us to continue our commitment to supporting Burkina Faso’s energy goals by building a second solar power plant just one year after the successful launch of Zano. This achievement is in line with the country’s energy supply ambitions and reinforces Qair’s vision to become a leading player in Africa’s renewable energy sector in the coming years.”

Distributed by APO Group on behalf of the African Development Bank (AfDB) Group.

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About SEFA:
SEFA is a multi-donor special fund that provides catalytic financing to unlock private sector investment in renewable energy and energy efficiency. SEFA offers technical assistance and concessional financial instruments to remove market barriers, build a more robust project pipeline and improve the risk-return profile of individual investments. The overarching objective of the Fund is to contribute to universal access to affordable, reliable, sustainable and modern energy services for all in Africa, in line with the New Deal on Energy for Africa and Sustainable Development Goal 7.

About Qair:
Qair is an independent renewable energy company that develops, finances, builds and operates solar, onshore and offshore wind, hydropower, tidal energy, waste-to-energy, battery storage and green hydrogen production.

With an operational capacity of 1.1 GW, the group’s 640 employees are developing a portfolio of projects with a capacity of 30 GW in 20 countries in Europe, Latin America and Africa. Our ambition is to become an independent leader in responsible energy.

In Africa, Qair’s portfolio of wind, solar and BESS assets includes 65 MW of operational projects, 174 MW/262 MWh under construction or financing, and a robust 2 GW+ pipeline. With over 15 years of presence in Africa and teams established in Burkina Faso, Chad, Mauritius, Morocco, Seychelles and Tunisia, Qair continues to expand its geographic reach in North, Central and West Africa and the Indian Ocean. Qair has already completed another 24 MW solar project (Zano) in Burkina Faso, which was awarded under a public-private partnership (PPP) with GoBF and a PPA with the National Electricity Company (SONABEL).

About FMO:
FMO is a Dutch business development bank. As a leading impact investor, FMO supports the sustainable development of the private sector in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has over 50 years of experience in empowering entrepreneurs to make local economies more inclusive, productive, resilient and sustainable. FMO focuses on three high-impact sectors: agribusiness, food and water, energy and financial institutions. With a total committed portfolio of ~€13 billion covering over 85 countries, FMO is one of the largest bilateral private sector development banks in the world.

About the African Development Bank Group:
The African Development Bank Group is the leading development finance institution in Africa. It is composed of three separate entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). Operating in 41 African countries and with an external office in Japan, the Bank contributes to the economic development and social progress of its 54 regional member states. More information: www.AfDB.org