AfDB Releases Funds for Chad Solar Projects

The African Development Bank on Friday released the first payout from a €37.9 million funding deal to build two hybrid solar plants in Gassi and Lamadji, Chad, through energy company Qair.

Qair reached financial close and secured the initial money transfer to start building the 30 megawatt-peak solar plants in Chad.

The solar facilities mix solar panels with an eight megawatt-hour battery system to store electric power.

Tchadelec, the state electricity company of Chad, signed a 20-year Power Purchase Agreement to buy energy generated from both plants.

A Power Purchase Agreement represents an official long-term legal contract where a power producer sells electricity directly to a buyer.

How multi-partner lenders funded the project

The African Development Bank Group arranged and provided the main funding package with help from three partner organisations.

Proparco, the Sustainable Energy Fund for Africa, and the Green Climate Fund contributed money to complete the deal.

The African Development Fund and the Green Climate Fund also created an €8 million Partial Risk Guarantee for the project.

This guarantee covers the letter of credit mechanism that protects payments owed by Tchadelec under the power agreement.

Guarantees help make energy investments safer for private developers operating in vulnerable African nations.

Desert to Power's push across the Sahel

"Reaching financial close and disbursing the first tranche of financing for the Gassi and Lamadji projects is a powerful demonstration of what the Desert-to-Power and Mission 300 initiatives can achieve when development finance institutions and the private sector align around a shared vision," said Wale Shonibare, Director for Energy Financial Solutions, Policy and Regulation at the African Development Bank.

"By bringing together AfDB financing with the support of partners such as Proparco, SEFA and the Green Climate Fund, we are unlocking bankable renewable energy projects in some of the most deserving markets on the continent, bringing reliable and affordable power closer to the people of Chad and the wider Sahel."

The project forms part of the bank's Desert to Power and Mission 300 programmes across the Sahel region.

These energy initiatives plan to build 10,000 megawatts of total solar generation capacity across several countries.

The bank aims to turn the Sahel area into the largest solar power producing zone across the globe.

Next steps as site construction begins

Receiving the first payout allows Qair to proceed immediately with physical construction work at both sites.

The plants will supply new solar power into the national grid system of Chad once engineers finish construction.

Qair operates among the first independent power producers building private energy projects inside Chad.

The company will manage operations at Gassi and Lamadji to supply power under the 20-year agreement with Tchadelec.