World Bank Approves Cameroon's Lom Pangar Dam Project to Boost Economic Growth and Provide More Reliable Power for Up to Five Million People

March 27, 2012

WASHINGTON, March 27, 2012 – The World Bank’s Board of Executive Directors today approved US$132 million in zero-interest financing for Cameroon’s Lom Pangar Hydropower Project (LPHP), to support the country’s economic development and significantly improve the supply of electricity to homes and businesses across Cameroon.

Together with 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 project will finance the Lom Pangar dam to 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 percent.

The immediate benefit for Cameroonians will be a 120 MW increase in electricity generation at two existing hydropower plants which will improve the reliability of power supply for up to five million Cameroonians 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 30 MW power plant which will replace expensive thermal generation and provide reliable access to electricity in eastern Cameroon, including 2,400 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 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 percent of people have access to electricity, and further develop the country’s significantly large, untapped hydropower potential. Studies show that Cameroon could generate 12,000 MW of hydropower, with the Sanaga River Basin alone providing nearly 50 percent of the untapped potential.

Total electricity generation capacity is now only 933 MW, 77 percent 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$ 494 million, with $132 million being financed by the International Development Association (IDA), the Bank’s fund for the poorest countries; and $163 million 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 $199 million 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.”

In 2011, World Bank helped to provide electricity to an additional 1.4 million people in African countries; construct and repair some 6,640 kilometers of roads; and improved water supplies for more than 8 million people.

Media Contacts
In Cameroon
Edmond Dingamhoudou
Tel : 237 7717 5842
In Washington
Phil Hay
Tel : (202) 473-1796, (202) 409-2909
Aby Toure
Tel : (202) 473-8302