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Gambia Signs Hefty Solar Power Deal with European Investment Bank

The Gambia government has signed a loan and grant agreement with the European Investment Bank to improve country’s power supply through renewable energy at the tune of 106 million Euros.

The loan amounting to 65 million Euros is payable within 25 years, while the grant is at the tune of 41 million Euros. The deal was signed on Monday in Kanifing, with both finance and energy ministers representing the government.

Under the scheme, 20 MW solar power plant will be provided to the national energy grid that will increase Gambia’s current generation capacity of 98MW and enable electrification of rural areas. 1,000 schools and 100 health facilities in rural communities are expected to benefit.

European Investment Bank Director responsible for lending operation outside the EU, Maria Shaw Barragan said the financial institution has a role in supporting and accelerating long term projects around the world.

“I am pleased to confirm that European Investment Bank supports the transformational path The Gambia is following and that we will be supporting through natural resource that you have plenty of, the sun, to increase power generation to 1/5th of the capacity of the country,” she said.

Barragan said with the solar plant, they are going to be financing 20 percent of energy needs of the country which will also be providing solar power for schools and clinics.

The project will increase access to energy in both urban and rural areas and will ensure the electrification that is meant to address power shortages and hindering social activities and economic growth.

Atilla Lajos, the European Union Ambassador to The Gambia said in project under the name ‘Investment Support and Tactical Assistance for The Gambia Sustainable Energy’, there’s no condition to the loan component except that The Gambia remains on democratic path.

“With this project, The Gambia will be the first country in Africa if not the only in the world to have been provided with renewable energy and electrification project for all public schools and health facilities fostering children’s education and health care provisions to simulate a more inclusive economic growth.”

He said the project is designed to ensure sustainable electricity solar power for at least 20 years which will reduce the use of heavy fuel meant to help Gambia’s efforts of reaching Universal Access to Electricity.

On the heels of concerns of Gambia’s debt level, The Chronicle engages the Finance Minister Mambury Njie on the sideline on why the government continues to take additional loans without settling previous ones.

“As part of our policy the only loans that we are taking is combined. Loans and grants like this one. We are avoiding by all means taking commercial loans. We are saying now if you are giving loans it has to be 50 percent grant. We either have 50 percent of grant or not. That is the bottom line. This way it is sustainable,” Njie told The Chronicle.

“We don’t take loans like that. We burn the mid-night candle to look at the cost of those funds and where also we are going to put it. The priority in our NDP is energy, and infrastructure and we are very mindful and careful.”

On whether Gambia can repay all loans it has taken so far, the Finance Minister said the country is still paying those debts.

“Of course I have no doubt that Gambia can repay all loans, that is if we manage our economy properly and looking at the future, promoting investment and ensuring financial discipline. We will be able to sustain.”

Minister Njie however said unless and until Gambia depends and broadens its tax pays, reduces leakages there will be no improvement.

“Once that is improved, there is no need to go for international debts. But if the costs of the funds are very expensive we don’t go for it. The bottom line is we will have to continue to make sure we broaden the tax pays not to increase it and also be accompanied by fiscal discipline.”

 

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1 Comment
  1. ML Joof says

    Let us all be mindful with the loans the Gambia is taken on how to pay them in the near future ….

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