Lomé Thermal Power Plant: Tripling energy production in one of Africa’s least-developed nations
Sector: Energy, infrastructure
Challenge: Insufficient energy supply in one of Africa’s least developed countries forced the Republic of Togo to institute rolling blackouts and posed a significant barrier to economic growth.
Solution: OPIC provided $209 million in loans and political risk insurance to ContourGlobal to build a 100 MW “tri-fuel” power plant.
Impact: The project increased Togo’s electricity capacity, reducing blackouts and diversifying fuel sources. In 2013, the project was also recognized as one of the Top 40 public-private partnerships of recent years by the International Finance Corporation and Infrastructure Journal.
Togo, a small country in West Africa, has one of the lowest rates of per capita energy generation in the world. In 2006, the country’s demand for electricity was nearly twice as high as production and the shortage of domestic energy was exacerbated by growing demand for electricity in the rest of West Africa, which reduced the ability of some neighboring countries to export to Togo. In addition, the country’s traditional reliance on imports of hydropower from Cote D’Ivoire and Ghana left its energy supply vulnerable to drought. The country was forced to ration power with daily rolling blackouts. Frequent power outages in 2006 resulted in an estimated $150 million to $190 million in private sector losses, about half of the annual revenue of the government of Togo.
The country recognized that it had to increase its generation capacity and diversify its energy sources in order to stimulate growth and development, but it struggled to attract investors.
In 2008, OPIC approved a $147 million loan and $62 million in insurance to ContourGlobal for the construction and operation of a 100 megawatt power plant in Lome, the country’s capital and its largest city. The 100 megawatt tri-fuel plant was designed to run on a variety of fuels including low-sulfur heavy fuel oil, light fuel oil and natural gas, depending on what is available. Later, in 2009, the World Bank’s International Finance Corp. division also invested in the project. The plant meets OPIC and World Bank environmental and emission requirements, and because it was designed to run on different sorts of fuel, it will be able to shift to cleaner burning natural gas when that becomes available.
The deal represented the largest electricity investment ever made in the Republic of Togo, and when it was completed in 2010 , it tripled the country’s energy generation capacity. Since the plant has come online, rolling blackouts have virtually ceased.
In addition to providing critical, reliable electricity to Togo, the Lome plant has spurred procurement of local goods and services, as well as goods produced in the United States.
The plant employs 68 people, most local residents, and it has also invested in the community by building schools, a local market, and providing potable water. The company continues to invest in the school, including the provision of adult education and distribution of malaria nets.
And ContourGlobal has since returned to partner with OPIC on projects in Nigeria and eastern Europe.
This project was profiled in 2013