Construction is under way at a 60MW wind farm in the Goubet region of Djibouti, near Lake Assal. Africa Finance Corporation (AFC), investment manager Climate Fund Managers (CFM), the Netherlands’ FMO and Djibouti Ports and Free Zones Authority’s Great Horn Investment Holdings (GHIH) announced on 12 February that they were using bridge financing to speed up development, an approach AFC has also taken with the 44MW Singrobo-Ahouaty hydropower project in Côte d’Ivoire. The project has been under development since 2017 and signed a power purchase agreement with Electricité de Djibouti on 19 May 2019.
AFC is the lead developer and project manager with CFM as co-developer and technical lead. CFM is a joint venture established by FMO and South Africa’s Sanlam InfraWorks to provide blended finance in emerging markets. It manages the Climate Investor One facility. FMO was responsible for insurance and environmental, social and corporate governance of the project while engagement with the government was led by GHIH.
“Social and economic development cannot be achieved without a reliable, affordable, competitive and cost-effective energy solution. With the ports, the railway, industries and other transport infrastructure projects we have developed and are developing, the availability of such energy is of paramount importance in order to ensure the gains are consolidated”, GHIH chairman Aboubaker Omar Hadi said. "The Djibouti International Free Trade Zone is set to become the biggest in Africa and, along with the Damerjog heavy industrial park, will both create a demand of 3,700MW over the coming decade. This gap can only be closed if the huge untapped potential of renewable energy in our country, such as solar, geothermal or wind are fully exploited”.
Djibouti aims to generate all of its energy using renewable sources by 2030 as well as reduce its emissions by 40%. The country is currently heavily reliant on HFO, with most of its domestically produced energy supplied by the 121MW Boulaous HFO power plant. Hadi said that, “this project constitutes a very important milestone as it will boost the supply side by securing a very competitive energy that will foster the industrialization. It equally contributes to the country’s strategic direction to shift to a 100% green energy generation.’’
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