The European Investment Bank (EIB) is to provide a €23 million (US$29.5 million) loan for solar development in West Africa.

The 20-year loan agreement is to support a 30MW solar development in Zagtouli, on the outskirts of Ouagadougou, the capital of Burkina Faso.

The solar plant is to be operated by the country’s national utility, Sonabel, and will significantly increase energy generation in the country, reducing energy imports from Ivory Coast and Ghana and preventing power cuts, EIB said.

As well as boosting energy generation, the project will create up to 100 jobs, the bank added.

Financing is also to be provided by the French Development Agency and a €25 million (US$32 million) grant allocated by the European Union in 2012.

The development is to serve as a reference point for future solar investments in the region.

The loan agreement was signed at the EIB headquarters by Burkina Faso’s minister of economy and finance, Lucien Bembamba, and Pim van Ballekom, EIB’s vice president for lending in Africa, the Caribbean and Pacific.

Jean-Christophe Ilboudo, director general of Sonabel and Frederic Korsaga, Ambassador of Burkina Faso to Luxembourg, were also present.

Ballekom said Burkina Faso “can be proud to host the new facility that will act as a benchmark for renewable energy in West Africa”.

“Electricity in essential for economic activity and the EIB is committed to supporting energy investment that will improve lives across Africa” added Ballekom.

The support from Europe “will help improve electricity supply in the country and demonstrate the opportunity for countries across Africa to benefit from renewable energy”, said Ambassador Alain Holleville, head of the European Union delegation to Burkina Faso.

Bembamba said: "The new support agreed today for investment by Sonabel in renewable energy is an important milestone in the long-standing cooperation between Burkina Faso and Europe.”

“Close cooperation over many years has enabled significant investment in new water and energy infrastructure that has created jobs across the country,” said Bembamba.

Sonabel also recently agreed with Canadian independent power producer, Windiga Energy, to press ahead with plans for a 20MW PV plant in Bakina Faso, to be built in Zina, Mouhoun province, scheduled for completion in late 2015.