Tripling electricity generating capacity in Togo

Africa/Middle East
Togo

Challenge

The small West African country of Togo had one of the lowest per capita rates of electricity generation in the world. In 2006, demand for electricity was nearly twice as high as production, and the shortage of domestic energy was exacerbated by growing demand for electricity throughout the region, which reduced the ability of some neighboring countries to export to Togo.

The country was forced to ration power with daily rolling blackouts. The frequent outages were limiting factory production and crippling the domestic economy.

Other challenges posed a threat to the country’s long-term power outlook. Togo had traditionally relied on imports of hydropower from Côte d'Ivoire and Ghana, which left its power supply vulnerable to drought. The country recognized it had to increase its generation capacity and diversify its energy sources, but it struggled to attract investors.

 

Power plant in Togo

Solution and Impact

Financing and political risk insurance to ContourGlobal supported construction of the 100 MW Lomé Thermal power plant, a tri-fuel plant designed to run on a variety of fuels including natural gas.

As the largest electricity investment ever made in Togo and the first international financing project ever completed by the Government of Togo, the project required complex negotiations in securing a long-term gas supply arrangement and developing a payment structure to ensure a strong power purchase agreement.

When the plant was completed in 2010, it tripled the country’s energy generation capacity. Having a reliable source of electricity has helped to spur investment and development in the country, including the rehabilitation of the port in Lomé, which is a major driver of economic activity throughout the country. This has also supported local job creation and knowledge transfer and helped Togo demonstrate to the world that it is a reliable and committed partner that can attract world class investors.