Together with aid from the African Development Bank (AfDB), the Central African States Development Bank (BDEAC), the European Investment Bank (EIB) the French Agency for Development (AFD), and the Government of Cameroon, the zero-interest finance will help fund a project which will see the Lom Pangar dam store water during the rainy season and later release it during dry periods, to increase all-season hydropower generation capacity on the Sanaga River by approximately 40%.
The immediate benefit for Cameroon will be a 120MW increase in electricity generation at two existing hydropower plants which will improve the reliability of power supply for up to five million people in the country and help to lower the cost of power. Electricity supply is often erratic, with frequent power cuts especially during the dry season.
The project also includes financing for a 30MW power plant which will replace expensive thermal generation and provide reliable access to electricity in eastern Cameroon, including 2400 newly connected households. In the medium term, the LPHP will also help develop additional hydropower plants in the Sanaga River Basin.
“Africa’s energy deficit suppresses its growth and deepens poverty, and this is certainly the case in Cameroon where many communities are starved for energy, and yet has the third largest untapped hydropower potential in Sub-Saharan Africa,” said Obiageli K. Ezekwesili, World Bank Vice President for the Africa Region. “Lom Pangar marks an important step in turning the lights on in more homes and businesses in Cameroon, lowering power costs, attracting new investors, and improving the all-season reliability of the country’s electricity. This project is a persuasive example of how hydropower provides clean, large-scale, affordable, and renewable energy and can play a major role in solving Africa’s energy crisis”
In considering the proposed financing, the Board of Executive Directors of the World Bank noted the urgent need for Cameroon to spur economic growth, improve the reach of its power supply, especially in rural areas where fewer than 14% of people have access to electricity, and further develop the country’s significantly large, untapped hydropower potential. Studies show that Cameroon could generate 12,000MW of hydropower, with the Sanaga River Basin alone providing nearly 50% of the untapped potential.
Total electricity generation capacity is now only 933MW, 77% of which comes from hydropower, and the rest from relatively expensive and polluting thermal generation.
“The Lom Pangar project helps the immediate needs of the people of Cameroon and their national economy,” said Gregor Binkert, World Bank Country Director for Cameroon. “It is a symbol of Cameroon’s determination to become an economic power since sustainable access to energy is a basic ingredient for private sector-led economic growth and better living standards for people. The project will attract private investment in hydropower by industrial users which will sell part of the electricity they produce to boost the public grid, and help to improve power services for all Cameroonians.”
Estimated costs for the LPHP are US$494M, with $132M being financed by the International Development Association (IDA), the Bank’s fund for the poorest countries; and $163M coming from the African Development Bank (AfDB), the Central African States Development Bank (BDEAC), the European Investment Bank (EIB) and the French Agency for Development (AFD) and $199M from the Government of Cameroon.
Approval of the Lom Pangar dam project is anchored in “Africa’s Future and the World Bank’s Support to It,” the World Bank’s regional strategy for the African continent which notes that closing the gap between infrastructure needs and investments is vital for job-led growth and facilitating private sector development. Reducing poverty and spurring growth through partnerships, knowledge, and financing are key priorities of the strategy.
“Designed to the best international standards, the LPHP is a unique opportunity to unlock Cameroon’s hydropower potential while safeguarding the environment and mitigating the dam’s impact on local communities,” said Meike van Ginneken, World Bank Sector Leader for Sustainable Development and project team leader based in Yaounde. “We look forward to the project’s effective implementation so that its power can benefit all Cameroonians and help to create better development prospects for communities.”
