World Bank Boosts Energy Supply to Support Regional Trade and Integration in West African Countries

April 29, 2015

WASHINGTON, April 29, 2015 − The World Bank Group’s Board of Directors today approved support for a regional transmission network to enable electricity trade among the western African countries of The Gambia, Guinea, Guinea-Bissau and Senegal.  The US$200 million IDA* credit will finance the construction of transmission lines to connect the electrical networks of the four countries and ground wires equipped with fiber optic cables to improve public communications.  

The cost of electricity generation in The Gambia, Guinea-Bissau, and Senegal is very high as a result of the region’s high dependence on expensive oil-based thermal generation. The Bank’s support of the OMVG Interconnection Project will help countries in West Africa to change the energy mix away from thermal generation by connecting them to more sustainable and cost-effective energy resources such as Guinea’s 6,000 MW of hydropower potential. Also, gas along the coast from Cote d’Ivoire to Nigeria and in Mauritania can be converted into power.

“Regional power trade is critical in West Africa. By grouping together the energy demands of the four countries, the OMVG Interconnection Project transmission lines will enable larger and more efficient generation of electricity, which is essential for business development, job creation, income generation, and international competitiveness,” says Colin Bruce, the World Bank Director of Regional Integration for Africa.

Many inter-connector transmission lines have been built or are under construction and OMVG is the missing link to create the transmission backbone infrastructure of the West African Power Pool (WAPP). Completion of the OMVG represents a critical step towards interconnecting the WAPP network and will improve the use of existing power generation capacity and reduce power outages from Nigeria in the eastern sector of West Africa to Senegal.

In addition to IDA, the project will be financed by French Development Agency (AFD), the African Development Bank (AfDB), the Islamic Development Bank (ISDB), the West African Development Bank (WADB), the European Investment Bank (EIB), the Kuwait Fund (KF), and the German Government (KfW).  The four governments will provide approximately US$16 million to finance interest during the construction phase to the total project cost of US$711 million.

“Increasing power trade in West Africa will help deepen political and economic integration and promote increased regional stability. The OMVG interconnection is potentially transformational and economically significant by helping new generation capacity to come on-line,” said Pedro E. Sanchez, the Project Task Team Leader.

“New high speed broad band connectivity to the four countries provided by the fiber optic cable included in the interconnection will bring new communication tools to households, businesses, and institutions throughout the region, helping to boost job opportunities, reduce poverty and improve the quality of life for millions of people in West Africa,” said Chris Trimble, Project Co-Task Team Leader.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.8 billion people, the majority of whom live on less than $2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.

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