French energy developer GreenYellow has obtained a €4.5 million ($5.2 million) guarantee from the Multilateral Investment Guarantee Agency to support the construction, operation and maintenance of a 30 MWp solar project in Burkina Faso.
The Paris-based company said the guarantee will cover its equity and quasi equity investments in Société de production d’énergie solaire de Ouagadougou SAS (SPES Ouagadougou) for a period of up to 20 years. The project will be implemented under a public-private partnership signed by the Burkina Faso Ministry of Energy. The electricity will be sold to Société Nationale d'Electricite du Burkina (Sonabel), the country’s state-owned utility, under a 25-year take-or-pay PPA.
Hiroshi Matano, the executive vice president of MIGA, claimed that the facility will help to address Burkina Faso's power deficit and support its transition to renewable energy. ”MIGA's support sends a clear signal to the private sector of the possibilities in the Sahel region,” he said.
The board of directors of MIGA, a member of the World Bank Group, has approved the guarantee and three other 102 MWp PV projects – Burkina Faso's first round of independent solar power producers.
Otmane Hajji, the president of GreenYellow, said the company aims to use its decentralized model to help Burkina Faso deploy more renewable energy. “Political risk insurance from MIGA demonstrates the group's ability to finance its growth ambitions in promising markets like Burkina Faso,” he said.
The agreement follows a recent investment in which GreenYellow obtained €21 million of financing from FMO, the Dutch development bank, for a 30 MW solar plant in Burkina Faso. The array at the Nagréongo power station, about 30 kilometers northeast of Ouagadougou, is scheduled for commissioning by the end of the year.
In June, the World Bank agreed to support Burkina Faso's Sustainable Renewables Risk Mitigation Initiative (SRMI) with $168 million to improve access to electricity in rural areas. The funds will be used to support the country’s Large Scale Solar and Rural Electrification Project. They will also be used for an upcoming tender for 325 MW of solar coupled with 335 MWh of storage capacity.
International Renewable Energy Agency (IRENA) statistics show that Burkina Faso had just 62 MW of installed solar capacity at the end of 2020. MIGA notes that the country relies heavily on expensive heavy fuel oil generation and imports from neighbouring countries such as Ghana.
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