How the U.S. helped Togo increase its electricity generation

Just 10 years ago, Togo depended heavily on its neighbors for electricity and suffered frequent blackouts. As a result, the country’s economic growth and development were lagging, which in turn affected the health, education and livelihoods of ordinary Togolese.

Today, the country is generating significantly more power with a 100-megawatt plant in Lomé, the country’s capital, that runs on natural gas and other fuels. Investment is flowing into the country, bringing jobs and development, including a much-needed port renovation.

The opening of the Lomé thermal power plant in 2010 might never have happened without the backing of ContourGlobal, a power generation company that was looking to invest in infrastructure projects in developing markets. Togo seemed a good candidate, but the company struggled to raise financing on open markets because of the perceived risk of investing in Togo.

“This project was one of those let’s-do-something-great projects,” ContourGlobal CEO Joe Brandt said at the time. “It was brash and the odds were long.”

So in 2008 ContourGlobal turned to the Overseas Private Investment Corporation for assistance. OPIC, the U.S. government’s development finance institution, supports American businesses that cannot obtain sufficient financing or political risk insurance from the private sector. Two years later, the plant was up and running, and Togo’s power-generating capacity had increased threefold.

Like other U.S.-backed programs, the power plant project created jobs and grew economies locally without burdening Togo with excessive debt.

The World Bank’s International Finance Corporation rated the Lomé power project one of the top 40 public-private partnerships of the five years from 2007 to 2012.

Togo’s electricity demand has continued to grow, and the success of the Lomé thermal power plant created a track record that enabled the country to attract investment on terms acceptable to lenders. In November 2018, the government signed an agreement with the Paris-based Eranove group for construction of a new power plant close to the port that will raise the country’s output to 193 megawatts. Financing will come from the African Development Bank, a multilateral lender, and a regional private bank, Orabank.

Once completed, the project is expected to supply additional electricity for the equivalent of 263,000 Togolese homes and stabilize the grid. Eranove, along with others, also is working to develop skills at the local level through training partnerships.