34MW Djermaya Solar project in Chad attracts new lenders

The Emerging Africa Infrastructure Fund (EAIF), the African Development Bank (AfDB) and Proparco will be the senior lenders for the 34MW Djermaya Solar project in Chad. The project will also have a 4MWh battery system.

AfDB previously announced its support for the project, having approved €18 million ($23,9m) senior debt facilities and a partial risk guarantee in 2019. AfDB, Proparco and EAIF signed a loan agreement with Djermaya Solar on 26 November 2021, with the finance institutions respectively committing €18m ($23,9m) and €9,3m $12,3m) 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.

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: “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.”

“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,” she said.

The Djermaya Solar Project in Chad forms part of the AfDB’s Desert to Power initiative

Kevin Kariuki, AfDB Vice President for Power, Energy and Climate Change said the flagship project, which forms part of the ADB’s Desert to Power initiative 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: “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.”

Project details
Located 30km north of the country’s capital, N’Djamena, 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 €6,35m ($8,4m) of concessional debt from the EU-Africa Infrastructure Trust Fund (EU-AITF).

InfraCo Africa has also leveraged $854,000 of grant funding from PIDG Technical Assistance (PIDG TA) to support legal and environmental advisory services and an additional $1,5m capital grant.

Djermaya Solar also benefits from strong support from the Government of Chad. 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.

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