At a cost of US$ 189M, the Malicounda dual-fuel power plant was developed by MP Energy (previously Melec PowerGen Inc), Senelec (National Electricity Company of Senegal), and Africa 50, an Investment Bank for Infrastructure in Africa.
The project entailed the design, financing, construction, and operation of a dual-fuel combined cycle power plant in Malicounda, Mbour, about 67 km from Dakar, the capital city of Senegal. It was carried out under a 20-year Build-Own-Operate-Transfer (BOOT) scheme and a PPA with Senelec (Société Nationale d’électricité du Sénégal), the national electricity company of Senegal.
The project was completed ad went into operation in Aug 2022.
Funding for the project
The Senegalese natural gas power plant was subsidized by a group of international infrastructure investors for a total of EUR 154 million in debt finance.
The financiers included African Development Bank (AfDB), the Arab Bank for Economic Development in Africa (BADEA), the West African Development Bank (BOAD), and the OPEC Fund for International Development (OFID). The West African banking group Oragroup, also provided EUR 76 million in bridge financing.
International law firms were involved in the financing deals, advising participants on all sides. Africa-focused law firm Asafo & Co advised the lenders, through Paris-based partners Simon Ratledge and Pascal Agboyibor.
Expectations for the Malicounda Dual Fuel Power Plant
The Malicounda dual-fuel power plant utilizes heavy-fuel oil (HFO) as the primary source of energy that is converted to natural gas. The facility is connected to the grid through the existing 225kV substation adjacent to the site.
It is expected to increase the electricity generating capacity in Senegal by 17% at the least while reducing generation costs by approximately 14%. If the savings are passed on to consumers this could result in a 3-7% fall in tariffs and a 1-3% rise in the country’s Gross domestic product (GDP).
The plant is also expected to help satisfy base loads, facilitating the integration of intermittent renewable power into the West African country’s network. Noteworthy, this type of combined-cycle power plant produces higher output at higher efficiencies (up to 55%) with lower emissions than the older open-cycle plants presently being used.
When converted to gas, the Malicounda dual-fuel power plant will form part of the evolution of Senegal’s energy mix from diesel which currently counts for about 75% of total generation capacity, to renewables, reducing gas emissions significantly.
Malicounda power station project in Senegal to receive a bridging loan
The Malicounda power station project is set to receive a bridging loan of close to US$ 91M from the Pan-African infrastructure investment platform Africa50, in collaboration with Oragroup, a subsidiary of Orabank.
The loan will assist in the construction of the Dual Fuel Power Plant which is scheduled to be completed at the end of this year. The implementation of the approximately Malicounda power station project began back in October last year but one.
Malicounda Dual Fuel Power Project in Senegal is over 95% complete
The implementation of the Malicounda Dual Fuel Power Project, particularly the construction of the dual-fuel combined cycle power plant in Malicounda, a village in the M’bour Department of the Thiès Region in western Senegal, approximately 67 km from Dakar, is 95% complete.
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The power plant whose construction work began back in October 2019 is expected to start operation in November this year. It will utilize heavy-fuel oil (HFO) as the primary source of energy and it will be converted to natural gas as soon as the latter is available in the West African country.
The electricity generated from this power plant will be sold under a 20-year power purchase agreement and fed into the national grid through the existing 225kV substation adjacent to the site.