Cameroon: Nachtigal Hydropower Co-01
IFI Synergy Platform on behalf of nearby communities.
Environmental and social concerns, loss of livelihoods, insufficient and late compensation, inadequate stakeholder consultations, improper and inadequate implementation of physical resettlement, relocation and destruction of sacred sites, increase in negative social issues, inadequate grievance redress mechanism processes, and impacts on agriculture.
IFC supports the Nachtigal Hydropower Project through an equity investment of up to €60 million and an A Loan of up to €130 million.
The Nachtigal project is a greenfield 420 megawatt run-of-river hydropower project on the Sanaga river, near Yaoundé, Cameroon. The site is located downstream from the Lom Pangar regulating dam. The project is the first independent power producer in the Sanaga river. The Republic of Cameroon granted a 35-year concession to the project company. According to IFC disclosures, the total project cost is estimated at €1.1 billion, financed with €0.8 billion in debt and €0.3 billion in equity.
IFC supports the Nachtigal Hydropower Project through an equity investment of up to €60 million and a category n A Loan of up to €130 million. According to IFC Disclosures, IFC planned to mobilize the rest of the debt package from other Development Finance Institutions (DFI) under its role as a global coordinator.
MIGA is supporting the project through guarantees of up to €164.5 million covering Electricité de France (EDF) and STOA—a French investment fund—equity and quasi-equity investment in the project. Guarantees are issued for up to 15 years against the risk of breach of contract.
In April 2022, Green Development Advocates lodged the complaint on behalf of communities living near the Nachtigal Hydropower Project. Green Development Advocates is a non-governmental organization (NGO) serving as the secretariat of IFI Synergy Platform, a network of NGOs based in Cameroon. The complaint raised environmental and social concerns including: inadequate stakeholder consultations, loss of income-generating activities for fishermen, sand extraction workers, and fish traders, insufficient and late compensation to the people in the affected communities that were compensated, improper and inadequate implementation of physical resettlement, relocation and destruction of sacred sites, increases in negative social issues including theft, juvenile delinquency, gender violence and certain diseases, environmental impacts (scarcity of rain, fish and healing plants, temperature increases and CO2 emissions above the project’s ESIA forecast), inadequate grievance mechanism, and impacts on crops outside of the initially designed project area covered by the environmental and social impact assessment, for which such neighboring communities have not been compensated. The complainants have also filed complaints in the African Development Bank Independent Recourse Mechanism and the World Bank Accountability Mechanism.
CAO found the complaint eligible for further assessment in May 2022. The case is currently being assessed. In line with CAO policy, the assessment period has been extended until October 31, 2022.
Note: A CAO assessment process does not entail a judgment on the merits of the complaint. Rather, the aim is to listen to people’s concerns, understand the different perspectives, and gauge whether it is possible to address the concerns through a collaborative process.
An assessment of this case is ongoing. In line with CAO policy, the assessment period has been extended until October 31, 2022.