Industry: Energy Region: Cameroon Deal price: $1 million Deal Method: equity financing
Introduction to the
Increase electricity supply in Cameroon's undersupplied areas.
Details:
Project Details:
Component 1:
Rural electrification through grid expansion.
This component consists of two sub-components:
(a) Sub-component 1.1: Expansion of medium/low voltage power grids for rural electrification.
This sub-component will fund the electrification of approximately 417 new areas in selected rural areas, with a total population of 104,096, representing potential in the far north, northwest, southwest, and eastern regions. Activities to be funded include:
(I) Construction of 2,537 km of high-voltage Class A lines;
(ii) Construction of 2,134 km of class A low-voltage line public lighting;
(iii) Installation of 544 overhead power stations/transformers including:
(1) 300 50 kVA transformer;
(2) 172 100 kVA transformer; and
(3) 72 25kVA single-phase transformers for single-wire ground loop.
(b) Sub-component 1.2:
Enhancement and extension of the existing HTB/HTA/BTA network to enhance the security of power supply to new villages in remote northern areas. This sub-component will finance the construction of (I) new HTA distribution substations and/or high Voltage Class B (HTB)/HTA substations; (ii) Construction of HTB/HTA lines; (iii) Upgrade single-phase MV; (iv) Upgrading a single-phase MV (SWER) network to a three-phase network to cope with increased demand; (v) Reconfiguration of the HTA network enables new places for charging.
Component 2:
Decentralized rural electrification. The design of the component is based on two concepts :(a) a private sector PPP concept, including that Cameroon energy will play a role as an operator rather than a direct investor. (b) To ensure the supply of the existing sol-miniaturization by Cameroon Energy at selected locations, i.e., to increase solar photovoltaic intermediate plants in HTA/BTA and to extend the existing network for better service coverage. Some 26 places are currently powered on as isolated systems. Therefore, the component consists of two sub-components:
Sub-component 2.1:
Pilot public-private partnerships for decentralized rural electrification development. The principle of private sector intervention is based on leasing the operation and maintenance of publicly funded infrastructure of the "guarantee" contract type. The rationale for this PPP model is that the parties agree to maintain uniform tariffs across the country and the possible impact on subsidies/offsets and vulnerability and poverty in these areas. The activities of this subcomponent include:
(I) Construction of two 3 MW micro-hydropower stations in the project area;
(ii) Construction of 70 km to 100 km of HTA lines and 70 km of BTA lines, bringing power to about 20 districts and about 2000 customers;
(iii) Recruitment of two operators for the operation and maintenance of the facility.
Component 3:
Support for home connection costs. This component will support the establishment of a revolving fund to help finance the initial household connection costs (including spare boards) for grid supply to 417 localities (targets under sub-component 1.1 and Component 2) and approximately 12 localities already energized. The objective of THE Fund is to support families in meeting the initial connection costs, and the fund will follow the standards and other principles set out in the Operational manual of the Fund and the technical specifications for Energy use in Cameroon. A flat fee (depending on the type and cost of connections) will be charged to reimburse the pre-allocated connection costs. The plan is designed to allow consumers to pay 2,000 francs and reimburse the connection fee for the type of connection over a period of six to eight years, depending on the situation.
Component 4:
Strengthening institutional capacity in power sector and project management. This component will support capacity-building and project management of executing agencies and entities. It will also support the establishment of an industrial strategy based on local expertise in rural electrification activities and the engineering, construction and maintenance of the HTA/BTA network, as well as the institutional reform of the AER. Partnerships with local organizations to develop gender technical skills will also be supported. The component is made up of five sub-components
Sub-component 4.1:
Strengthening institutional capacity in the power sector. This sub-component will support the Department of Water and Energy, the Power Sector Regulator and the Rural Electrification Authority. Support may include analytical and consulting activities, travel, training, equipment, office space and vehicles, as required. Training needs have been identified in different areas, including project management, power distribution and rural electrification, power transmission, procurement, finance and accounting, and environmental and social protection. This component will provide professional training for staff responsible for connecting families. The purpose of the training is to sensitize actors involved in the electricity sector to the importance of providing and managing electricity services. If needed, training will enable staff to gain a more comprehensive understanding of their consumers and increase their knowledge of the different needs associated with electric services, thus improving service to customers.
Sub-component 4.2:
Owner engineer responsible for project supervision. This sub-project will fund the recruitment of an engineering firm to monitor and control the quality of the implementation of the engineering works funded under the project, as well as the environmental and social impact assessment of the project and the implementation of the relocation action plan.
Sub-component 4.3:
Building (I) an industrial strategy based on rural electrification activities; (ii) Local expertise in the engineering, construction and maintenance of the HTA/BTA network. Implementation of the master plan for rural electrification will generate steady and sustained investment flows over 20 years. The Government of Cameroon considers the Rural Electrification Master Plan to be a multisectoral tool for rural area development. Therefore, the Government of Cameroon wants to develop an industrial strategy based on rural electrification activities under the rural electrification Master Plan to create industrial enterprises and retain some of the investment flows in the country. Thus, this sub-component will provide funding for (1) research to build local expertise in the design, erection and maintenance of rural networks; (2) Formulating local business promotion policies for electrification works and operations; (3) Launch new industrial activities in the power sector and supply rural electrification equipment (poles, cables, electrical accessories); (4) Capacity-building of local actors to manage large long-term projects; (5) Develop specific regulations (standardization) and controls in the field of rural electrification.
Sub-component 4.4:
Income generation and capacity building for women and youth. As employees, female representation can enhance the business and social performance of energy entities, better anchor the company's operating environment, and increase revenue opportunities. As employment growth in the energy sector continues to grow through investment, it is critical to develop and implement policies to create more gender-inclusive workplaces.
Sub-component 4.5:
Institutional reform in support of the African development strategy. The subcomponent will fund a diagnostic study to review tasks in decentralized electrification and to develop an implementation methodology for the Cameroon Power access Plan (project management and contracting, planning and decision-making tools, staffing financing, and necessary support and training plans). The sub-component will also fund the implementation of diagnostic research results.
Sub-component 4.6:
Project management support. This sub-grouping will primarily ensure that the technical, financial, operational and trust assistance required by implementing agencies is provided to ensure the successful implementation of the project.
Component 5:
Emergency response. Emergency response component, where required, to redeploy some project resources with resources from other projects in the Cameroon portfolio to respond to crisis and emergency needs. The implementation of this component will respond immediately if needed to the formation mechanism coordinating agencies and expenditure management procedures will respond immediately to the operations manual defined in the mechanism and be ready to provide investment project financing policies and directives in accordance with the guidance. In the event that this component is required, the project will be restructured to allocate funds, revise the PDO and indicators, and detail implementation arrangements for crisis and emergency response.