Power Projects Bolster Strong Growth Outlook
BMI View : Cote d ' Ivoire ' s construction sector is on track to post consistently strong growth over the medium term, following a decade of highly volatile growth. Improving infrastructure is a priority following the 10 - year political crisis which crippled investment. Expanding power capacity is one of the main goals of the government, and this should support construction sector growth over the medium term.
Cote d ' Ivoire ' s construction industry is expec ted to rebound strongly in 2013, at 13.6% year-on-year ( y-o-y ) , following a number of years of weak to no growth. The sector has suffered from decades of underinvestment as a result of a political crisis which culminated in a civil war in 2011. Specifically this rebound w ill be driven by a handful of large projects, all due to start construction in 2013. This will drive industry growth over the medium term (2013-2017) at an average rate of 10.6% per year, compared to -0.7% between 2007 and 2011.
|Growth To Trend Higher|
|Cote d'Ivoire Construction Industry Value And Growth|
Power projects make up the largest portion of the project pipeline. The government is prioritising investment into the sector, with plans to invest US$500mn in power plants, to add 150MW per year in new capacity. Cote d'Ivoire's electricity supply is currently one of the best in the region, however, the country is looking to bolster supply ahead of expected demand domestically, but also to generate revenues through the West African Power Pool to capitalise on demand growth across the region. Most recent developments include:
The Soubre hydropower dam, for which a loan agreement with China ExIm Bank was signed in January 2012. The loan, worth US$500mn will cover the majority of the US$600mn price tag. The loan was granted on generous terms, with a nine-year grace period with a 20-year repayment period at a rate of 2%. The power plant will have a 220MW capacity, increasing current capacity by around 15%. China's Sinohydro is due to start construction in February, and be completed in four and a half years.
In late December 2012, the African Development Bank approved a US$50mn loan for the expansion of the Azito power plant. The project includes converting a simple-cycle power plant to a combined cycle, increasing generation capacity to 430MW (from 288MW). The project will be executed on a build-finance-operate basis by domestic company Azito Energie.
Plans also include a 330MW combined cycle gas turbine (CCGT) near Abatta being developed by ContourGlobal on a build-operate-transfer basis. The project will cost US$584mn to build and is due to be completed in 2015/16.