- Date written
- June, 2017
- Contact for guarantco
- Marjolein van Kampen
- Communications Director
- +44 (0)738 8857097
- Contact for PIDG
- Cecille Sorhus
- Head of Communications
- +44 (0)7917 302724
PIDG company GuarantCo has provided a 13-year Debt Service Reserve Account guarantee (‘’DSRA’’) for USD 4.06 million on behalf of Albatros Energy Mali SA (‘’AEM’’). The DSRA guarantee is in favour of various lenders and regional development funds.
The guarantee will facilitate the construction of a 90MW HFO fired power plant, in the Kayes region of Mali. AEM holds a concession agreement with the Government of Mali (‘’GoM’’) to build, operate & transfer the power plant, which will cost an estimated USD 124.7 million.
Access to energy is an ongoing issue for households and businesses in Mali and new sources of energy are urgently required. The minimum offtake by EDM will represent approximately 8% of 2019’s projected generation capacity for the country. Despite having potential for solar and hydro projects, the current pipeline of projects cannot provide a base power generation solution. Thus, thermal generation remains an essential part of Mali’s power strategy. As a result, Energi du Mali (‘’EDM”) has added the AEM project to the 2016 – 2018 list of ‘’Priority Projects’’ for Mali. AEM will add up to 90MW of power generation capacity to the national grid.
In his speech at the recent Albatros signing ceremony in Paris, GuarantCo’s Regional Director for West Africa, Jules Samain, said that ‘’GuarantCo is very pleased to be part of the development of the energy sector in Mali. We will use the knowledge gained in this transaction to support subsequent transactions in Mali. We provided our innovative Debt Service Reserve Account product to ensure the viability of this project, which will provide a reliable source of energy for Mali and support economic growth and development in the country’’.
The Kayes region of Mali is an important industrial area, making it a prime location for the power plant to fuel the economy, which is currently 663km from the capital Bamako and suffering from insufficient power supply. The region’s main economic activities are gold mining and cement production. Hence, the area is a significant contributor to the country’s economy and economic development.
GuarantCo’s CEO Lasitha Perera said that ‘’GuarantCo is delighted to support the first IPP in Mali, a country which we see as having a bright future ahead, GuarantCo is keen to support Mali’s development through the provision of guarantees of infrastructure projects’’.
It is a major achievement that this private power project has been launched by a local investor in Mali’s challenging, post-conflict, investment climate and entered in to the country’s first IPP. By offering GuarantCo’s first DSRA guarantee in Mali, GuarantCo has actively assisted to develop a financial structure that is unique for Mali and its energy sector.