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African bank funds Niger's 125-MW Kandadji Dam, ecosystems

The African Development Fund (ADF) has approved a combined loan and grant of 40 million Units of Account (UA) (US$62 million) for the Kandadji Ecosystems Regeneration and Niger Valley Development Program.

Part of the funding is to help finance construction of the 125-MW Kandadji Dam on the Niger River. Niger President Mamadou Tandja laid the first brick of the project August 3, about 180 kilometers northwest of Niamey. The dam is due for completion in 2013.

ADF, the concessionary window of the African Development Bank approved a loan and a grant of UA20 million (US$31 million) each October 29. The funding is to help provide solutions to the recurrent drought in Niger and the degradation of natural resources by regenerating the riverine ecosystems and boosting agricultural production with poverty reduction as the ultimate goal.

The program includes construction of a dam of 1.6 billion cubic meters for regulating the flow of the Niger River in order to provide the water needed for irrigation, drinking water, sanitation, ecology, grazing, and fisheries. About 629 gigawatt-hours of electricity will be provided annually as a by-product that will make the structure as profitable as possible, the bank said.

The project's first phase is estimated to cost UA186.2 million (US$290 million), about 56 percent of the overall cost of UA333.82 million (US$519.8 million). Part of the ADF money will go to implementation of environmental and social plans and program management.

Earlier this year, the Arab Bank for Economic Development in Africa agreed to lend US$10 million to Niger to help finance the first phase of the dam. (HNN 8/26/08) Kandadji Dam also is being funded by the Islamic Development Bank, which has pledged US$236 million. Financing for the hydropower station is due to come from a public-private partnership, the government has said.

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