The World Bank Board of Executive Directors Tuesday (6 July) approved an International Development Association (IDA) credit of 45 million US dollar to assist Benin reinforcing and expanding electrification and ensuring financial sustainability for the west African countrys power sector through restructuring and private sector participation in the distribution of electricity.
The credit will fund a plan to rehabilitate, reinforce and expand the power distribution system in Benin.
The Benin Electricity Services Delivery Project, as it is known, will ensure the financial sustainability of the power sector in Benin. It will involve the private sector in partnership with the public sector and expand the contribution of the power sector to economic growth and improvement in the quality of life.
The financing will also enable the building of approximately 350 km of a single circuit 161 KV system in Benin between Kara in Togo to Djougou and Parakou, and Between Djougou and Nattitingou and between Parakou and Bembereke in Benin. It will build substations at Parakou and Djougou
A second component of the project will ensure the expansion of power lines to provide electricity to several towns presently supplied by diesel generating units and 93 villages not yet electrified. This includes 35 villages along the right-of-way of the transmission lines, ensuring (by project completion) an electrification rate in Benin of about 30 percent, from the current electrification rate of about 22 percent.
In addition to these physical investments, the project will provide compensation for all that will be affected by the construction of the transmission lines, whether for loss of their habitation or their crops.
The project does not fund power generation needs in Benin, but relies on completion of the interconnection with Nigeria which should satisfy Benins needs for power in the near future.
The “Communaute Electrique du Benin” (CEB) is responsible for electricity generation and transmission in Benin and Togo. The CEB also supplies electricity in bulk to the power distribution utilities in both countries.
Whereas the power distribution utility in Togo was privatized in December 2000, the one in Benin has remained public and will only be privatized under this project. In addition, the project is expected to open the power generation market to independent generation companies, although CEB will be retained as the “Independent Buyer” for both Benin and Togo.
The IDA credit is provided at the standard commitment fee of 0,5 percent, a service charge of 0,75 percent, and a maturity of 40 years, including a 10-year period of grace.
The Government of Benin will finance other aspects of the project, whose total costs is estimated at 95,7 million US dollar for Phase One, and 166,7 million for Phases One and Two.
Additional funding is also expected from a number of bilateral and multilateral donors, including the West African Development Bank, and the Nordic Development Fund.
For more information on the World Banks work in sub-Saharan Africa visit www.worldbank.org/afr
Kilde: www.world.bank.org
