The project sponsor is Office National de l’Electricité (ONE) from Morocco. ONE is Morocco’s electricity utility created in 1963. ONE focuses on energy generation, transmission and distribution. In 2009 ONE had annual energy sales of 22, 384 GWh supplying electricity to 4.05 million customers. Each year ONE undertakes large investment projects to increase its installed capacity and to extend the transmission and distribution networks including to rural areas. ONE has a long experience in rural electrification. Over the years, ONE has developed an expertise in rural electrification trough the use of grid connections and photovoltaic kits in Morocco. By the end of 2009, over 32,000 villages had been supplied with electricity in Morocco since the inception of ONE’s Global Rural Electrification Program in 1996 giving access to over to 1.8 million households, and achieving a 96.5% electrification rate. ONE has more than 14 years of experience investing in solar technology in Morocco. As of end 2009, ONE had electrified 3,663 villages with solar kits (around 10.6% of total electrified villages), supplying electricity to 51,559 households (2.8% of the total rural households). ONE has also acquired a deep knowledge and understanding of operating in Senegal as it is currently implementing Comasel St Louis, the first rural electrification concession of Senegal.

Total Project costs amount to $18.4 million, which will be financed with a mix of sponsor’s equity, shareholder loans and subsidies. The Company will receive up to $14.3 million equivalent in Output Based Subsidies from the African Development Bank (“AfDB”).

0.80 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	0.80

* These investment figures are indicative

The concession area comprises all villages of the departments of Louga, Kebemer and Linguere. The concession area represents 15% of the Senegalese territory and covers a surface of 29,188 km2 with a population of approximately 622,000 inhabitants in 2000 of which 80% is rural. Only 13% of this rural population is currently electrified (as of 2006).

The project will have significant development impact as it will support the improvement of the living conditions of population in rural areas and the reduction of poverty. The project aims to support the progressive transformation and improvement of living conditions of the population in rural areas of Senegal which at present lacks electricity. This will be achieved by (i) providing lighting and access to modern communication to 11,826 new rural households, (ii) improving delivery of social services, health centers and schools and (iii) enhancing economic productivity through the provision of electricity for productive purposes. The population in rural areas depends on fuel-wood for cooking, on wicks, kerosene lamps and some small batteries for lighting, and on human force – frequently from women – for domestic and productive tasks. The project should promote growth and the personal development of women and children by making their domestic work load less heavy The social benefits from electrification – the ability to power lights, radios, small appliances and televisions – will make a significant contribution to enhancing the quality of life and the reduction of poverty. The Project will improve access to electricity as it will provide electricity to 11,826 rural users (9,945 via connections to the national grid and 1,852 with individual solar kits), in the next three years who at present do not have access to electricity. The project will have a positive environmental impact since it will help to reduce CO2 emissions through the use of renewable energy. It will promote conservation by: using renewable sources of energy (solar energy) and reducing deforestation. Comasel Louga has opted for solar powered systems to complement the electricity provided by Senelec. Clean renewable energy sources will help reduces the use of individual fuel based generators and wood fuels thus reducing pollution in these communities.

The presence of IFC in the capital structure of the Company will provide comfort to other future private concessionaires as the Government of Senegal will tender more rural electrification concessions, but also to possible senior lenders during the life of the concession. The presence of IFC will provide comfort as to a fair and equitable treatment of the private rural electrification concessionaire by local authorities and as the feasibility of rural electrification under the proposed scheme. IFC will provide much needed long term resources in the form of equity investments, given the scarcity of private equity financing for rural electrification. IFC’s participation along with ONE in the Comasel Louga concession after the Comasel St Louis concession will support South-South investments. IFC will support a Senegalese company with a majority held by a Moroccan sponsor. This proposed investment will be IFC’s second investment in rural electrification in Senegal and will consolidate IFC relationship with ONE IFC’s involvement in the project will ensure the application of (i) best practices of corporate governance, and (ii) IFC’s Performance standards and will promote sustainability by ensuring that the implementation of the Project meets international social, environmental, health and labor safety standards.

The key anticipated Environmental and Social (E&S) impacts from this rural electrification project are occupational health and safety in particular electrocution risk to workers as well as the community during installation of solar kits and new distribution lines and maintenance; solid and liquid waste management during construction and operation; and community engagement. As such the project is a category B project as the aforementioned impacts are, limited in scope and can be readily managed by implementing the proposed Environmental and Social Management plan (ESMP).

For further information on environmental and social issues and mitigation measures please see the Environmental and Social Review Summary.