afrol News, 22 June - The construction of the innovative 67.5 MW diesel power generation plant at Kounoune, 23 kilometres east of Dakar, is getting financial support from large international finance institutions. The Kounoune plant is hailed as a cheap way to increase levels of electricity supply, although it will increase Senegal's dependence on oil imports and threatens air quality in Dakar.

The African Development Bank (ADB) today joined other major financing institutions in approving a loan of 8 million euro for the implementation of Senegal's Kounoune Thermal Power Project. According to the Bank, "this project aims at increasing the current level of electricity supply at a competitive cost in order to meet the growing demand for electricity in Senegal."

The Kounoune project earlier this year has been termed "a very innovative programme" by World Bank representative Michel Layec, who also announced that the Bank would provide Senegal with generous credits for the project. Kounoune would "help meet the increasing demand for electricity by the population and businesses, reduce costs to the customers and improve the quality of the electricity services," the World Bank said.

According to the ADB, the project consists of three components. These are the construction and operation of a 67.5 MW heavy fuel diesel plant; the construction of a fuel supply pipeline for heavy fuel, connecting the plant to the fuel import source at Cap des Biches; and a substation linking the plant to the grid of Senelec, Senegal's public power utility.

Senelec will be the sole offtaker of the project's electric production. A 15-year power purchase agreement was executed by and between the project company and Senelec in February, guaranteed by the government of Senegal. Senelec expects to increase its power supply at reduced costs, but also bears the risk if the Kounoune project suddenly needs to raise prices due to oil supplies.

The project is seen as innovative because it facilitates private sector investment in new power production facilities. Kounoune is privately owned and the Senegalese government only has been needed to provide guarantees. Further, it uses rather cheap heavy fuels - which would be avoided in Western countries due to environmental damages - to produce power at cost-effective prices. The total project costs are estimated at about 61 million euros, which is low for such a large power producer.

Besides the risks related to fluctuating oil prices, the project also has been scrutinised for its possible environmental risks. The Kounoune power plant is to be placed in a rather densely populated area; a suburb only 23 kilometres east of the capital city of Dakar. The plant is bound to produce toxic gases as it burns heavy fuels to produce energy.

An environmental review presented earlier this year by the International Finance Cooperation (IFC) - a member of the World Bank Group and a co-financer of the Kounoune project - however plays down these risks. Even if there are several villages within 1 to 2 kilometres from the project site, now grave risks were found for local residents in the study.

Ambient air quality levels around the project site were "predicted to exceed the relevant Senegalese ambient air quality standards" during limited times, the environmental impact study nevertheless found. This was only to be met with "continuous air quality monitoring" and possible "measures" at a later stage, IFC said. In general, the IFC study found the project to be environmentally sound.

By staff writer

© afrol News

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