The project sponsors are AES Corporation (56%) and the Republic of Cameroon (44%).

With 2004 revenues of US$9.5 billion, 44,000 MW of capacity, and a workforce of 30,000 people, AES Corp is one of the world’s largest global power companies. Its interests include 120 power generation assets and 17 distribution companies delivering electricity to 11 million residential, commercial and industrial customers in 26 countries. It is listed on the NYSE and rated B+ (positive outlook) by Standard & Poor’s.

Total cost of the five-year investment program is estimated at more than EUR 350 million, of which EUR 135 million will be allocated to refurbish distribution assets, EUR 105 million to renew and build new transmission assets, EUR 70 million to rehabilitate generation assets, EUR 25 million for improvement of dam safety of the existing hydroelectric plants and reservoirs, and EUR 11 million for improvement of the company’s environmental and safety performance.

The project will be financed partly through a EUR 240 million facility from a syndicate of Development Financial Institutions comprising AfDB, DEG, EIB, Proparco, Central African Development Bank (BDEAC) and IFC. IFC’s share of the DFI facility is expected to be up to EUR 70 million.

85.21 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	85.21
Equity

* These investment figures are indicative

Although AES Sonel is headquartered in Douala, the economic capital of the country, its operations span the entire territory of Cameroon and the investment program includes refurbishment and construction of assets that are located throughout the country.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result from the project and can be avoided or mitigated.

IFC’s appraisal of social and environmental, health and safety issues included:

- AES Sonel’s environmental, health and safety, and social management system;
- environmental, health and safety performance of the current operation (air emissions, liquid effluent, hazardous and non-hazardous waste, noise, electromagnetic field, Polychlorinated Biphenyls (PCBs), pesticide and larvicide use to combat River Blindness disease, wood preservative use at wood pole treatment plant, dam safety, occupational and public safety, environmental regulatory compliance);
- social performance of the current operation (resettlement, encroachment, retrenchment);
- environmental, health and safety and social impacts of the proposed 5-year Investment Plan;
- Environmental and Social Action Plan for the project; and
- potential corporate reputation risk issue due to indirect association with the potential Lom Pangar Dam Project which is being studied by the Government of Cameroon for development in the future.

Following this appraisal, IFC has concluded that the project will meet the applicable World Bank/IFC environment and social policies and the environmental, health and safety guidelines upon successful implementation of agreed mitigation measures, which are summarized in the attached Environmental and Social Action Plan.

For more detail on the Environment & Social due diligence, please consult IFC’s Environmental Review Summary.
Location of environmental documents In locally affected community

These documents can be reviewed in the administrative offices of the named persons.

AES-SONEL HQ
Avenue Charles de Gaulle
PO Box. 4077-Douala
Alexandre Siewe
Tel: 342-57-66
Fax : 342-57-66

AES-SONEL – Yaounde
PO Box 151-Yaoundé
Auguste Bassega
Regional Director Centre/ South /East
Tel: 222-17-68/222-19-30
Fax: 222-17-68

AES-SONEL – Limbe
PO Box 28-Limbe
Simon Nyambal
Regional Director West/ South West/ North West
Tel: 333-25-56/333-25-57
Fax: 333-25-58

AES-SONEL – Garoua
PO Box 263-Garoua
Rene Marie Ossende
Regional Director North/ Far North / Adamaoua
Tel: 227-11-08/227-14-70
Fax: 227-18-16

IFC Office
PO Box 4616-Douala
Mehita Sylla Fanny
Business Development Officer
IFC –Douala
Tel: 342-80-33
Fax: 342-80-14

Over the last 4 years, IFC and the World Bank have been working in close cooperation in Cameroon to help address the critical needs of the electricity sector. IFC, on the one hand, is coordinating the syndicate of Development Financial Institutions (DFIs) raising the financing for a major portion of AES Sonel’s post-privatization investment program.

The World Bank on the other hand, is helping the GOC to:
- strengthen sector institutions,
- develop a least cost generation expansion plan for Cameroon; and
- develop generation projects, such as the proposed Kribi power plant, under public-private partnership schemes.

The AES Sonel investment program is expected to have a very significant development impact on the Cameroonian economy by providing incremental power supply to existing and new electricity customers. In Cameroon, the main stakeholders who are expected to benefit from the investment program are end-users (both households and businesses), the GOC, AES Sonel employees and contractors. Without the investment program, customers would be faced with load shedding, which would restrict the ability of the Cameroonian economy to grow. Furthermore, AES Sonel plans to connect, on average, an extra 51,000 households every year for the next 15 years. It is expected that these new connections will benefit mostly urban and peri-urban middle and low income residential customers. Also, at a time of restricted investment in infrastructure in Africa, the investment program will demonstrate the benefits of privatizing and reforming the power sector, which is expected to encourage other countries to emulate Cameroon’s example.