BANKS DODGY DEALS CAMPAIGNS
About BankTrack
Visit us
Organisation
Our team
Our board
Guiding principles
Team up with us
Jobs at BankTrack
Our annual reports
Funding and finances
History
BankTrack in the media
Our privacy policy
Donate
2023-03-17 00:00:00
Briefing: The role of financial institutions in decarbonising the steel sector
2023-03-09 00:00:00
Dutch bank ING supports controversial pipeline to import gas from authoritarian Azerbaijan
2023-02-23 00:00:00
Financial institutions need to address steelmaking’s coal addiction
2023-02-07 00:00:00
What COP15 means for banks: meeting the Global Biodiversity Framework requires protecting Indigenous rights and divesting from harmful industries
2023-03-20 08:50:41
Who dares to finance Eni and Exxon’s dangerous Rovuma gas plans in Mozambique?
2023-03-14 14:59:00
New ING policy could spark bank shift away from financing oil and gas infrastructure
2023-02-24 13:46:14
Pego power station conversion plans halted
2022-12-14 11:08:26
HSBC announces it will no longer finance new oil and gas fields
Connect
2022-11-22 00:00:00
Banking on Thin Ice: Two years in the heat
2022-11-17 00:00:00
BankTrack Global Human Rights Benchmark 2022
2022-10-21 00:00:00
Burning forests in the name of clean energy? How banks are failing to exclude the harmful wood biomass industry from finance
2022-06-28 00:00:00
The East African Crude Oil Pipeline (EACOP): Finance Risk Update No. 3
2022-04-05 00:00:00
The BankTrack Human Rights Benchmark Asia
2022-03-30 00:00:00
Banking on Climate Chaos 2022
See all publications
Sections
Banks Dodgy Deals Campaigns
Our campaigns
Banks and Climate
Banks and Human Rights
Banks and Nature
Banks and Pandemics
Our projects
Tracking the NZBA
Banks and Putin's war in Ukraine
Tracking the Equator Principles
Tracking the PRBs
Find a Better Bank
Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances History BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Donate Mailing list Facebook Twitter Login
Home › Dodgy Deals ›
Dodgy Deal
Malicounda oil-fired power plantSenegal

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Last update: 2022-02-08 00:00:00
The Malicounda oil-fired power plant in Senegal. Photo: Courtesy of Lumière Synergie Développement

Project – On record

This profile is no longer actively maintained, with the information now possibly out of date
Last update: 2022-02-08 00:00:00
Why this profile?

Why this profile?

The development of the Malicounda oil-fired power plant is clearly not aligned with the pathways required to meet the 1.5°C temperature goal under the Paris Agreement. The plant's expected CO2 emissions would seriously exacerbate the negative effects of climate change.

The project meant loss of land for local communities and has severe health impacts on local people.

What must happen

Banks and other financial institutions should not provide any financial or advisory services relating to projects that involve expansion of fossil fuel development, such as the Malicounda oil-fired power plant, or to companies planning them.

About
Sectors Oil-fired power plant
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website https://www.melecpowergen.com/

The Malicounda project is a 120MW oil-fired power plant under construction located in the village of Keur Maissa Faye, in the rural district of Malicounda in the M’bour Department, approximately 87 kilomtres from Dakar, Senegal. Once completed, the power plant will run on heavy fuel oil but it has the option of running on gas. The project’s majority shareholder is Lebanon-based company MP Energy (55%), previously Melec PowerGen. The other shareholders are Africa50, an infrastructure investment platform (30%) and Senelec, the national electricity company of Senegal (15%).

Impacts

Impact on human rights and communities

The project required the clearing of 18 hectares of land, resulting in thirteen households losing agricultural land and 32 households losing a combined 115 housing plots. In total, 765 people are affected by the project.

There was no resettlement process, instead those affected were compensated in cash which was paid before a Resettlement Action Plan (RAP) had been drafted. Those affected did not receive the proper documentation (a census form), that officially identifies them as an affected person and lists their losses, meaning they were not able to sign anything formally. The compensation proposed in the RAP, 1,500,000 CFA francs (around $2600) per plot of 300 m², was considered inadequate by the affected households because they did not compensate for the losses suffered. Some affected people have still not received compensation.

The communities in the vicinity of the project - Malicounda Ngeurigne (a part of Malicounda Sereer), Malicounda Bambara, and Keur Maissa Faye (a part of Milicounda Wolof) communities - have or will be impacted by the project, as most practice agriculture, trading or fishing for their source of income.
Community members have not been adequately informed about the risks of the project, or the plans for displacement and existence of a RAP. They were also not consulted on compensation, the environmental and social management plan or the participatory livelihood improvement plans that were drawn up for farming households.

Lumière Synergie Développement (LSD), a Senegal-based lobby and advocacy organisation that monitors development finance institutions, filed a complaint concerning the compensation process through the AfDB complaints mechanism. The organisation blames the bank for a lack of project monitoring and failing to follow up on its recommendations to Senelec, leading to non-compliance with the Bank’s operational safeguards for land acquisition, population displacement and compensation.

Health impacts: The operation of the power plant involves burning of fuel oil, giving off toxic fumes, and emitting smoke and hazardous waste. The resulting air pollution and dust from the project is likely to create health impacts such as dermatological conditions and respiratory ailments for the workers and surrounding communities. The Senegalese Environmental Code stipulates a buffer zone of 500 metres between power plants with high environmental and social impacts, such as Malicounda, and houses and buildings open to the public and yet maps in the ESIA clearly show that this is not the case. The project therefore not only violates this code but also increases the risk of health impacts occurring.

Job opportunies: The project is supposed to generate 300 jobs during the construction phase and 60 jobs during operation and, despite commitments to employ the local population as stated in the ESIA, community members report that most workers employed come from other parts of the country, and those who were employed recently lost their job because construction work is coming to an end.


Impact on climate

Climate change: The plant will burn 197,000 tonnes of heavy fuel oil per year. This will generate 108,000 tonnes of CO² per year, worsening the climate crisis that Senegal is already facing.

More than 70 percent of the workforce in Senegal is employed or earns an income through agriculture. Rainfall has been inadequate and smallholder agriculture, which is predominantly rainfed, is already experiencing difficulties due to overexploitation of land and degraded soil. Climate change is expected to magnify most of these challenges.

In addition, the fishery sector, another large source of employment and diet, stands to be impacted by climate change induced rising surface water temperatures and ocean acidification and housing along the coast is at risk from sea level rise-induced erosion.


Other impacts

Challenges for environmental and human rights defenders: “The challenges that organisations and communities face are mostly related to the environmental and social assessment of projects. These ESIAs are often incomplete or poorly done. When they are done well, the recommendations made may not be respected or implemented because of the strong political support for these types of projects. This is also the case with this project because the design and ESIA is based on a hypothetical switch from an oil-fired power plant to a gas-fired power station in the future”, according to Lumière Synergie Développement, Senegal.

Financiers

The project is expected to cost around EUR 150 million, to be financed by 75% debt and 25% equity. Part of the debt was financed by long term loans arranged by the African Development Bank (AfDB). In 2018, the African Development Bank (AFDB) provided  a EUR 51.26 million loan for the project.

In March 2021, the project secured a EUR 75 million bridge loan arranged by Orabank Group and co-financed by Bank of Africa, La Banque Outarde, and La Financière de l’Afrique de l’Ouest.

Institution type
Finance type
Year
Companies

Project sponsor

MP Energy

Lebanon
Website
55% owner
No companies

Other companies

Africa50

Morocco
Website
30% owner

Senelec

Senegal
Website
15% owner

Wärtsilä

Finland
Website
Constructor
No companies
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Communique de presse - Plainte contre le projet de construction d'une centrale thermique de 120MW a Malicounda, Senegal

2021-12-20 | Lumière Synergie pour le Développement & le Collectif des Impactés par la Centrale Électrique de Malicounda
BankTrack news BankTrack blog Partner news Partner blog

Malicounda Dual Fuel Power Project in Senegal over 95% complete

2021-08-14 | Construction Review Online
BankTrack news BankTrack blog Partner news Partner blog

Bird & Bird advises Oragroup SA in the financing of the Malicounda power plant

2021-06-17 | Africa Logistics Magazine
BankTrack news BankTrack blog Partner news Partner blog

Africa50, Melec PowerGen, Senelec and Orabank Group Secure €75 million Syndicated Bridge Loan for Completion of Malicounda Power Plant in Senegal

2021-03-01 | Africa50
BankTrack news BankTrack blog Partner news Partner blog

Senegal: African Development Bank Group approves € 51.26 million loan for Malicounda Dual Fuel power plant

2018-11-29 | African Development Bank
Resources
Documents
2022-03-03 00:00:00

Locked out of a Just Transition: fossil fuel financing in Africa

BankTrack publication
2022-03-03 00:00:00 | BankTrack, Milieudefensie & partners
2020-06-30 00:00:00

Resettlement plan

Other document
2020-06-30 00:00:00 | Ministry of Petroleum and Energy of Senegal
2018-10-31 00:00:00

Environmental and social impact assessment

Other document
2018-10-31 00:00:00 | Ministry of Environment and Sustainable Development (MEDD) Ministry of Petroleum and Energy (MPE) Department of Environment and Classified Establishments (DEEC)
2017-04-12 00:00:00

Climate change risk profile Senegal

Other document
2017-04-12 00:00:00 | United States Agency for International Development
2021-10-31 00:00:00

The sky's limit Africa

The case for a just energy transition from fossil fuel production in Africa
NGO document
2021-10-31 00:00:00 | Oil Change International, 350Africa, Africa Coal Network, HOMEF, Oilwatch Africa & Womin
2018-09-13 00:00:00

Environmental and social impact assessment

(document in French)
Company document
2018-09-13 00:00:00 | African Development Bank
Send feedback on this profile
Sections
Banks Policies Dodgy Deals Campaigns
Our campaigns
Banks and Climate Banks and Human Rights Banks and Nature Banks and Pandemics
Our projects
Tracking the NZBA Banks and Putin's war in Ukraine Tracking the Equator Principles Tracking the PRBs Find a Better Bank Banks and the OECD Guidelines
Media
News Publications
Fossil Banks No Thanks StopEACOP Forests & Finance Banks & Biodiversity Drop JBS Bank of Coal Don't Buy into Occupation
BankTrack
About BankTrack Visit us Organisation Our team Our board Guiding principles Team up with us Jobs at BankTrack Our annual reports Funding and finances History BankTrack in the media Our privacy policy Donate
Successes Contact BankTrack
Vismarkt 15
6511 VJ Nijmegen
The Netherlands
Tel: +31 24 324 9220
Contact@banktrack.org
Donate Mailing list Facebook Twitter
©2022 BankTrack
BankTrack is a registered charity in the Netherlands (ANBI) - RSIN 813874658
Find our privacy policy here

Stay up to date

Sign up now for all BankTrack's news


Make a comment

Your comment will be reviewed, before being posted