European Investment Bank and AES Sonel have signed a finance contract for EUR 65 million to part-finance AES Sonel's investment program for rehabilitation and safety improvement of the Song Loulou Dam and ancillary investments improving transmission and distribution of power. The EIB, European Union's long-term lending institution, supports AES Sonel's post-privatisation investment program, which is estimated at EUR 380 million and aims at boosting generation capacity and improve electricity services. The project aims at raising the system's efficiency, reliability and quality and permits the extension to, on average, 50,000 annual additional connections over the next 15 years throughout Cameroon.
Incorporated under the laws of Cameroon, with 44 % of shares remaining in Government hands, AES Sonel is the recently privatised national electricity utility, formerly Société Nationale d'Electricité du Cameroon. AES Sonel is responsible for electricity generation, with exclusive right to provide transmission and distribution services in Cameroon.
AES Sonel's post-privatisation investment program aims at rehabilitation of infrastructure to meet increased demand and improve efficiency, reliability, quality and access to electricity. It will reduce technical and commercial network losses, reduce costs and have limited environmental impact.
The Financing plan of AES Sonel's post-privatisation investment program provides for EIB and IFC (coordinator of the lenders) financing of EUR 135 million, together the largest portion of a syndicate with also the African Development Bank, the Central African Development Bank, DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, the Emerging Africa Infrastructure Fund, FMO - The Netherlands Development Finance Company and Proparco.
The EIB, established in 1958 by the Treaty of Rome, finances capital investment projects that further the European Union (EU) policy objectives. It also participates in the implementation of the EU's co-operation policy towards third countries that have co-operation or association agreements with the Union.
Financing in Africa, the Caribbean and the Pacific (ACP) is carried out under the provisions of the Investment Facility, set up by the ACP-EU Partnership Agreement, signed in Cotonou in June 2000. Under the Cotonou agreement the total financial aid available amounts to EUR 15.2 billion for 2002-2006, of which EUR 11.3 billion is grant aid from the EU member states, EUR 2.2 billion is managed by the EIB under the Investment Facility and up to EUR 1.7 billion is in the form of loans from the EIB's own resources. The Investment Facility is a revolving facility (loan amortizations will be invested in new operations), aiming at supporting technically, environmentally, financially and economically sound projects in the private or the commercially run public sector.