Benin Secures €28 Million for Its First IPP Solar Projects

Proparco and the International Finance Corporation (IFC) are mobilizing 28 million euros to develop four solar photovoltaic power plants in Benin. This joint financing effort supports AXIAN Energy Green and Sika Capital in establishing a cumulative capacity of 62 MWp. The initiative is part of Benin's strategic effort to reduce its reliance on thermal power plants by increasing private investment in renewable energy.

This operation marks a significant development for Benin’s energy market, representing the country’s first energy project led by an independent power producer (IPP). The IPP model allows private entities to generate electricity and feed it into the national grid. AXIAN Energy Green and Sika Capital—an investment vehicle co-owned by Caisse des Dépôts et Consignations du Bénin (CDC Bénin) and Egnon Consulting—are spearheading this initiative. The French company Sagemcom has been contracted for the engineering, procurement, and construction of the plants and will also provide maintenance for the first two years of operation.

The 28 million euro funding package will facilitate the installation of these facilities at four different locations within Benin. Upon completion, the four solar plants are projected to contribute approximately 10% of Benin’s current installed electrical capacity. They are also expected to prevent approximately 62,000 metric tons of CO2-equivalent emissions annually and improve access to electricity for nearly 50,000 households. The project is expected to support the creation or retention of about 5,845 indirect jobs.

This initiative is crucial for Benin’s energy independence, given that over 80% of its installed capacity still relies on fossil fuels, while electricity demand continues to grow. The new solar installations aim to diversify energy production sources, reduce the country’s dependence on fossil fuels, and strengthen its energy autonomy by providing competitively priced renewable electricity. For investors, the project demonstrates the viability of private investments in renewable infrastructure, addressing challenges in securing long-term commercial bank financing for pioneering projects.

For Proparco, a subsidiary of the Agence française de développement, this marks its first financing in Benin’s energy sector and extends its collaboration with the AXIAN group. This initiative complements broader efforts by the Agence française de développement in distribution networks and solar capacity development. The joint financing by Proparco and IFC is particularly vital for early-stage projects, which often face difficulties in securing long-term commercial bank financing—a critical factor for developing new production capacity in a sector with substantial investment needs.