Senegal plans to return to the financial markets “as often as possible” following its five times-oversubscribed $500 million bond issue last month, according to government minister Karim Wade.
Wade, minister for a range of activities including infrastructure and energy, said the government plans to use these funds for road and energy schemes
Dakar is also looking to raise project finance “from a more diverse number of sources, especially emerging markets”, Wade said. Big deals involving China and South Korea are expected in coming months, he said, without elaborating.
Wade, who is the son of Senegalese president Abdoulaye Wade, was seen as a presidential contender before the ‘Arab spring’ made family succession a hot issue across the continent.
The local press has focused personalized attacks on him and his multi-sector Ministry of International Co-operation, Air Transport, Infrastructure and energy (Micatti) empire.
Wade was upbeat about Senegal’s partnership with African Development Bank (AfDB) and success at getting big ticket projects away. He confirmed that “Senegal would close its latest big project debt financing in the next week”, providing Eu140 million for the 125-megawatt Sendou coal-fired plant.
AfDB is providing a Eu55 million senior loan for Sendou, which is being developed by a Swedish/French joint venture to supply troubled state utility Senelec.
The debt structure involves the Netherlands’ FMO, the Infrastructure Crisis Facility, regional lender Banque Ouest Africaine de Développement (BOAD) and local bank CBAO. AfDB investment officer Marc Mandaba said CBAO’s involvement “shows how we can use local [CFA franc] financing to keep costs down”.
But there would be limits to borrowing. “We have debt ratios to respect,” Wade said. “We don’t want to join the club of countries who have been overburdened with debt, like Greece.”
Under political pressure at home, where Micatti is widely blamed for persistent power blackouts and other woes, Wade found a receptive audience of officials and bankers keen to hear how Senegal had launched four major AfDB-backed infrastructure schemes in less than two years.
Wade said that the integrated approach had “delivered results” without any detriment to poorer Senegalese. The Eu525 million Blaise Diagne International Airport (AIBD) project would generate revenues to “help us reduce poverty and meet our [Millennium Development Goals] MDGs”.
Working with a Senegalese administration strongly focused on developing big projects on a public/private partnership (PPP) basis, President Wade’s government “has pushed our [Infrastructure Finance] team to a new level”, AfDB vice president Bobby Pitman said.
With the model created by the AIBD, Sendou, Dakar Toll Highway and Dakar Container Terminal projects Senegal can become a model for PPP developments elsewhere on the continent, Pitman argued. “We have moved beyond theory.”
Under AfDB’s “integrated infrastructure approach”, only a major railway investment had failed to garner the needed support in recent months, Mandaba said.