African Trade & Investment Development Insurance (ATIDI) has announced it is granting a liquidity guarantee to the Sokodé photovoltaic solar power plant project, with a capacity of 62 MW, in Togo. This guarantee is provided via the Regional Liquidity Support Facility (RLSF) and covers a twenty-five-year power purchase agreement concluded with Compagnie Énergie Électrique du Togo (CEET). The scheme put in place covers up to six months of revenues over a fifteen-year period for the independent power producer.
A favourable framework for investors
The project, led by Meridiam and Électricité de France (EDF), will benefit from a connection to the national grid via a new 11-kilometre line financed by the Togolese State. In a country where more than 40% of the population lacks access to electricity, the Sokodé plant aims to strengthen supply security and diversify the national energy mix, which is still 80% dominated by fossil fuels and imports.
The implementation of the ATIDI guarantee comes at a time when mobilising private financing remains a key challenge for the energy sector in West Africa. According to data shared by ATIDI, this is the tenth project supported by the RLSF on the African continent. Payment risk coverage mechanisms are designed to address the main concerns expressed by international lenders, especially regarding the security of revenues for producers.
Examples of guarantees applied in the region
In Burundi, ATIDI’s Regional Liquidity Support Facility (RLSF) has already supported the financing of two hydropower plants developed by SongaEnergy. These facilities, accompanied by Trade and Development Bank and Anzana Electric Group, demonstrate the guarantee’s role in securing the financial structuring of independent projects. In Ethiopia, ATIDI has signed a memorandum of understanding to support public-private partnerships in solar and hydropower using the same payment guarantee tool.
The take-or-pay formula adopted for the Sokodé solar power plant offers financial visibility to investors, while responding to the authorities’ intention to diversify national generation. The project is aligned with Togo’s objective of universal access to electricity by 2030, with an ambition to reach 50% renewables in the energy mix.
Leverage effect on solar financing
The liquidity coverage provided by ATIDI helps unlock credit lines for long-term projects in a region still facing strong dependence on electricity imports. This payment security for independent producers is a key argument for attracting new private actors to develop Togo’s solar potential and, more broadly, in West Africa.
ATIDI Chief Executive Officer Manuel Moses told Agence Ecofin that “the RLSF guarantee facilitates the mobilisation of private financing in markets considered risky, while reassuring investors about the reliability of financial flows”. The Sokodé solar power plant is thus expected to help improve the balance of the national grid and reduce the country’s dependence on imported energy sources.
