Pioneering Djermaya Solar project attracts new lenders to Chad
3rd Dec 2021
Paris, France: InfraCo Africa, part of the Private Infrastructure Development Group (PIDG) is pleased to announce the participation of its sister PIDG company, the Emerging Africa Infrastructure Fund (EAIF) alongside the African Development Bank (AfDB), and Proparco as senior lenders to the 34MW Djermaya Solar project in Chad (also including a 4MWh battery system). AfDB previously announced its support for the project, having approved €18 million senior debt facilities and a Partial Risk Guarantee in 2019. AfDB, Proparco and EAIF signed a Loan Agreement with Djermaya Solar on 26th November 2021, with the finance institutions respectively committing €18 million, €9.3 million and €9.3 million of senior debt to the project. This announcement forms part of the overall package of climate commitments PIDG presented at COP26 in Glasgow in November.
Located 30km north of the country’s capital, N’Djamena, the Djermaya Solar project has been developed by InfraCo Africa, through Anergi Africa Developments Ltd (AADL), with its partner Smart Energies. Denham Capital recently entered the project as long-term investors through Neo Themis.
Fatou Gaye, InfraCo Africa’s Business Development Manager for the project, said: “InfraCo Africa is delighted to welcome The African Development Bank, Proparco and our sister PIDG company EAIF as lenders to the Djermaya Solar project. We are also pleased to be working with Denham Capital and the Neo Themis team to progress the project through to construction and operations in the coming months.” She continued, “Developing this pioneering project together with Smart Energies has not been without its challenges, but I feel it is true testament to the determination of the project partners, government agencies, and the national utility – Société Nationale d’Electricité (SNE) – that we are today announcing the involvement of three such well-respected lenders who share our belief that Djermaya Solar will demonstrate the potential of solar energy to support sustainable economic development in Chad.”
Doruk Karabulut, Director at Themis stated: “Themis is proud to become the strategic investor in Djermaya Solar and excited to reach financial signing of the project with the lenders. We recognise and commend the efforts done by InfraCo Africa, AADL and Smart Energies for the development of the project and would like to thank the African Development Bank, Proparco and EAIF for their strong support to achieve this significant milestone. The Djermaya Solar project is the first of its kind in Chad and demonstrate Themis’ continued commitment to pioneering renewable projects in Africa. We look forward to reaching financial close in the coming months and starting the construction of the project.”
Kevin Kariuki, AfDB Vice President for Power, Energy and Climate Change, added: “As part of the Desert to Power initiative initiated by the Bank, this flagship project is pioneering in several respects. First solar power plant in Chad, first electricity storage infrastructure, it is also the first public-private partnership (PPP) in the form of an Independent Power Producer (IPP) in the country. This model could be replicated in other Sahelian countries under the Desert to Power Initiative in order to attract investments and accelerate the transition to clean energy. The AfDB has deployed various financing instruments for this Project: The Sustainable Energy Fund for Africa (SEFA) to support the development phase and a technical assistance to the Chad electricity company for the management of storage facility, the mobilisation of senior debt and a Partial Risk Guarantee (PRG).”
Paromita Chatterjee, an Investment Director at EAIF said, “The Djermaya project is particularly significant because it is pioneering renewable energy and battery storage in Chad. Its key strategic function is to help Chad unlock the country’s economic potential and to fly the flag for more green energy projects in the country.”
Ariane Ducreux, Director of Proparco’s Energy, Digital and Infrastructures Division said “Proparco is pleased to support the Djermaya Project which contributes to the energy transition by adding renewable power capacities and addressing the growing demand for energy in Chad, which is amongst the priority countries for Proparco and AFD Group. This project is the Group’s first project in Africa to integrate a storage system, ensuring proper integration of intermittent solar energy into the N’Djamena electricity grid.”
Djermaya Solar will be developed in two phases totalling 60MW and is the first solar project to be designed, financed, built and operated by an independent power producer (IPP) in Chad. The project will also pioneer utility-scale energy storage in the country, incorporating a 4MWh Battery Energy Storage System (BESS), 18km transmission line and a substation funded with €6.35 million of concessional debt from the EU-Africa Infrastructure Trust Fund (EU-AITF). InfraCo Africa has also leveraged US$854,000 of grant funding from PIDG Technical Assistance (PIDG TA) to support legal and environmental advisory services and an additional US$1.5million capital grant.
Djermaya Solar also benefits from strong support from the Government of Chad and the project company, Djermaya CDEN Energy (DCE), has signed a 20-year Power Purchase Agreement with SNE to supply Chad’s national electricity utility. The Government of Chad and DCE have also signed a Put and Call Option Agreement and a Fiscal and Customs Agreement as part of the project financing approach required to commence construction in early 2022. Djermaya Solar is expected to begin delivering power to Chad’s national grid in 2023.
Lighting the way for renewables in Chad
The Djermaya Solar project will develop 60MW of solar PV in two phases, gradually integrating renewable power into Chad’s national grid. By establishing a cross-sector Task-Force, this project is drawing on both public and private sector expertise to rapidly develop a solution that is bankable and aligned with the Government of Chad’s aspirations.