Cameroon, EDF Energy Sign $1B Agreement To Build Hydroelectric Dam At Nachtigal Falls

Cameroon signed a $1 billion framework agreement with French energy giant Electricite de France (EDF) to build a hydroelectric dam at Nachtigal Falls, an official source told Agence de Presse Africaine news agency Thursday. Construction of the 420-megawatt plant is slated to begin by the middle of 2016, while commissioning should start mid-2021.

Per the agreement, EDF will become a shareholder in the facility with 40 percent stake, while the World Bank’s International Finance Corporation and the Cameroonian government will provide 34 percent and 26 percent of the funding, respectively.

The hydroelectric dam will be built along the Sanaga River and a 40-mile transmission line will transport the energy produced to the main grid in the capital city, Yaounde, as well as part of the southern interconnected system. Cameroon’s Minister of Water Resources and Energy said the future power plant will solve 20 percent of the country’s energy needs, according to Cameroon Tribune, a local newspaper.

The dam will also enable a five-fold increase in Cameroon’s aluminum production by supplying power for a government-run factory at Edea, some 125 miles southwest of Yaounde, whose yearly output of the metal has plunged from 90,000 tons to around 60,000 tons due to scarce energy supply.

“Our main reason for this contract is to raise power supplies to industries and increase aluminum production to 300,000 tons per annum,” energy and water resources minister Basile Atangana Kouna told the Wall Street Journal last year.

Cameroon, whose economy is forecast to grow by at least 5 percent annually between 2015 and 2018, is undertaking several electricity projects in order to ramp up power production to 3,000 megawatts by 2020. Most recently, privately-owned Green Energy Norway Cameroun announced in September it will be investing over $186 million into the country’s energy sector toward building a 300 megawatt natural gas plant.