Expected to begin operations in 2021, the wind farm will contribute to the country's aim to transition towards 100%-renewable energy-based electricity production by 2030
AFC and partners support 60MW wind farm in Djibouti. (Credit: Pixabay/Pexels.)
Africa Finance Corporation (AFC) has announced an investment of $63m to construct and operate a 60MW wind farm in Djibouti.
The wind farm will be located near Lake Assal and has been in development since 2017. The project also invited further investment from Climate Fund Managers (CFM) and the Dutch entrepreneurial development bank FMO.
The wind farm is supported by 25-year power purchase agreement with Électicité de Djibouti
The wind farm is expected to start commercial operations in 2021 and the power from it will be sold under a 25-year take or pay power purchase agreement with Électicité de Djibouti. The agreement has been backed by the Government of Djibouti.
AFC and its partners claimed to have adopted a new approach to financing, which is an all sponsor equity financing, enabling them to begin construction within two years, a reduction from typical 3-5 years of development cycle.
Djibouti presently has less than 100MW of reliable power for its population. The country’s electricity demand is also expected to increase due to several large-scale infrastructure projects such as ports, free trade zones and railways that the government has undertaken.
The new wind farm is expected to act as a key contributor for generating clean electricity. The country targets to transition towards 100%-renewable energy-based electricity production by 2030.
AFC president and CEO Samaila Zubairu said: “We are delighted to have the opportunity to invest and develop such a significant renewable power project in Djibouti.
“We have invested in many renewable projects in Africa, including the Cabeolica Wind Farm in Cape Verde, which won recognition in the International Finance Corporation Emerging Partnerships top ten private-public partnerships in Africa.
“We see renewable and green projects as a key part of our investment strategy as we look to support a sustainable future in Africa.”