Finnfund

Finnfund is a shareholder in the project company that is bringing wind power to the island republic of Cape Verde, off the west coast of Africa. Shares in Cabeólica S.A. are also held by Nigerian-based Africa Finance Corporation and by Infraco, a consortium for African infrastructure development established by the World Bank and five European countries – Austria, the Irish Republic, the Netherlands, Sweden, Switzerland and the United Kingdom.

Other Cabeólica shareholders are Cape Verde’s power and water company Electra and its government. Loans for the project are being provided by the European Investment Bank (EUR 30 million) and the African Development Bank (EUR 15 million).

Long-planned project

The total costs are 60 million euros. The Cabeólica Wind Farm Project has been under planning for more than ten years but, for a variety of reasons, financing arrangements of these earlier attempts have not been concluded until now.

There will be a total of 30 wind turbines, with a combined output of 25.5 MW. The turbines are being built on four islands, Santiago, São Vicente, Sal and Boa Vista.

Turbine construction is a turnkey project by a Portuguese subsidiary of the Danish wind power specialist, Vestas. Long-term upkeep and maintenance will also be provided by Vestas.

A winter start to construction

Turbine construction began in winter 2011 in Santiago and São Vicente. “On both islands, roads have been built, foundations have been made for the turbine masts and the area alongside has been levelled and reinforced for heavy cranes,” says Finnfund Senior Investment Manager Helena Teppana, who has been following project progress. Casting of the foundations began in mid-March and the first masts and turbines are expected to be installed in June.

“Power production is scheduled to begin in the first two islands in August 2011. When the earthmoving and foundation work is completed there, the team will move to the two other islands,” Teppana explains.

A quarter of local electricity needs

Cabeólica will sell the electricity produced to the national grid. It will cost Cape Verde’s power company, Electra, less than electricity produced at diesel-powered plants, some of which are Electra’s own.

When all the turbines are in operation, they will generate about a quarter of the electricity used in the islands. The project has great significance for this small, poor island republic, which has to import expensive fossil fuel from abroad.

The rest of Cape Verde’s electricity is diesel-generated. The project will create wind-diesel hybrid networks on four islands.

Excellent location for wind power

Compared with other parts of the world, the islands offer excellent conditions for wind power farms. “The wind is our oil,” the managing director of Infraco, Richard Parry, points out.

Adds Helena Teppana: “Now the people of Cape Verde are finally generating electricity by using their own natural resources. Judging from a few visits to the islands, they seem to have plenty of it.”

The project will reduce carbon emissions and improve the reliability of the power supply. Moreover, the price of electricity from wind turbines will probably be less subject to fluctuations than from fossil fuels.

Potential for more wind power

The government of Cape Verde plans to build more wind farms in the future. By 2020, it wants to generate 50 percent of the power used in the islands from renewable energy sources.

The Cabeólica Wind Farm Project has aroused widespread public interest as the first large-scale wind power project in Africa.

“Cabeólica has good possibilities to enlarge its generating capacity in future years, after the first project has been completed and its electricity sold according to plan,” Teppana predicts.

The Cabeólica Wind Farm Project received in March the Best Renewable Project in Africa Award.

For more details, please contact Ms Helena Teppana tel. +358 9 3484 3304, +358 40 822 8296, firstname.lastname@finnfund.fi