DBSA - Refinancing for gas-fired combined cycle power plants (Part II)

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The state-owned South African development bank, the Development Bank of Southern Africa (DBSA), plans to issue a loan of up to USD 60 million to the private project company Cenpower to finance the Kpone gas-fired combined cycle power plant (340 MW) in Ghana. To refinance this loan, the DBSA is to be granted an ODA-eligible development loan of up to USD 60 million (1st tranche USD 29 million (33389), 2nd tranche USD 24 million (35868)). This is intended to strengthen the role of the DBSA as a pan-African development bank. The Kpone gas-fired combined cycle power plant, which is to be built around 24 km west of Accra in the coastal town of Kpone, will increase generation capacity in Ghana by more than 13%. This will help to reduce existing supply bottlenecks and enable further economic growth. In addition, a reduction in CO2 emissions of around 20% is targeted compared to the baseline scenario. The electricity generated by the gas-fired combined cycle power plant directly displaces electricity from diesel emergency generators, which are regularly used in Ghana due to the current supply bottlenecks. The use of gas to generate electricity in Ghana therefore represents a bridging technology that makes sense in terms of climate policy and should be used until renewable sources of electricity generation are developed. The Ghanaian project company Cenpower is responsible for the development, construction and operation of the gas-fired combined cycle power plant. The Africa Finance Corporation (AFC), Cenpower Holding Company Limited (CHL), InfraCo Africa Limited (a PIDG facility) and the Sumitomo Corporation hold shares in the project company. At the same time, the South African development bank IDC, which is also state-owned, will participate in the financing of the power plant with up to USD 30 million in debt capital. It is planned to also refinance the IDC loan with a subsidized loan.