InfraCo Africa committed funding to five new projects in 2015
4th Jan 2016
InfraCo Africa continued to strengthen its pipeline through 2015, committing up to US$36m to develop five new renewable energy projects across sub-Saharan Africa. Reaffirming its ambition to ‘do more’, InfraCo Africa will continue growing its capability and pipeline through 2016.
The last two years have witnessed considerable change within InfraCo Africa, it has established an internal co-development capability with its own pipeline and procured a new developer (Aldwych) while continuing to work with its principal developer, eleQtra. This investment has started to pay dividends.
US$36m committed to new projects
Over the last year InfraCo Africa has committed early-stage development funding and expertise to five new projects.
Western Power Company (Zambia): In March, InfraCo Africa committed to jointly develop a 40-80MW run-of-river hydropower project in Zambia’s Western Province and will invest up to US$5m in funding for the external studies, offtake and lender negotiations, procurement activity and other work required to ensure the project reaches Financial Close. The project company has successfully signed an Implementation Agreement with ZESCO (the state owned power utility) and is also negotiating a pioneering community benefit sharing scheme. These agreements will enable the project to not only provide power to the national grid, helping to alleviate economically crippling power deficits, but also directly and positively impact those families living in the surrounding area.
This project is being jointly developed by eleQtra (on behalf of InfraCo Africa) and the Western Power Company.
Corbetti Geothermal (Ethiopia): InfraCo Africa has committed US$15 million in funding to develop up to 70MW of geothermal power in Ethiopia over the next four years. The project will be situated on a greenfield site, prove a new geothermal resource, be the first IPP in Ethiopia, and amongst the first private sector geothermal plants in sub-Saharan Africa. To address these challenges the project will be developed in two initial phases: the first, wholly equity funded, will drill up to 6 exploratory wells and build a small power plant; the second phase will raise debt financing to drill a further 9 – 13 wells and construct a commercial-scale power plant and facilities. If successful, then subsequent phases (leading up to 500 MW) would result in the Corbetti project mobilising approximately US$2 billion in Foreign Direct Investment over the next 8-10 years, transforming Ethiopia’s energy system and paving the way for other IPPs in the country.
Berkley Energy are leading development of this project, drawing on funding and expertise from InfraCo Africa, the Africa Renewable Energy Fund (AREF), Icelandic Drilling and Reykjavik Geothermal.
Pavua Hydropower (Mozambique): InfraCo Africa committed to develop a 120MW hydropower plant in Mozambique and will invest up to US$8m to take the project from inception to Financial Close. Mozambique is vulnerable to climate change, experiencing frequent floods and droughts that, coupled with power deficits, are constraining its economic development. This project will partly address these constraints, unlocking some of the country’s significant hydro potential to provide clean, renewable power to the national grid by 2021. The project will involve the construction of reservoir which will also help manage downstream flow, improving water security for communities in the region and reducing flood levels.
This project is being jointly developed by eleQtra (on behalf of InfraCo Africa) and Tora Holdings.
Djermaya Solar (Chad): InfraCo Africa have agreed to jointly develop a 30MW Solar PV plant in Chad. InfraCo Africa will invest up to US$3m to fund development through to Financial Close. The Djermaya project will be developed in two phases, with the first 30MW intended to be operational by 2017. This pioneering project will be both the first commercial scale solar PV plant and the first IPP in Chad: a critical first step as the Government of Chad diversifies the nation’s energy mix and seeks to attract further private sector investment into power generation.
This project is being jointly developed by Aldwych Africa Developments Ltd (on behalf of InfraCo Africa), CDEN and JCM Capital.
Redavia (Tanzania): InfraCo Africa has committed to invest up to US$5m to fund the growth phase of a solar photovoltaic rental business in Tanzania. Redavia Tanzania Asset Ltd. (‘Redavia’) was founded in 2014, with support from its parent organisation Redavia GmbH, the Shell Foundation, REEEP and others. Redavia supplies containers, with an installed capacity of 91KWp of solar power, to businesses and communities across Tanzania. The solar PV containers can be deployed and installed in less than six days and connect directly to low voltage grids: they displace energy from diesel generators, reducing operating costs and carbon emissions. InfraCo Africa will fund an initial pilot (two containers) in early 2016 and, if successful, fund deployment of a further 30 containers.
Committed to continued growth
InfraCo Africa is starting 2016 with a strong pipeline of projects and will maintain its focus on providing the funding and expertise required to ensure that these projects progress through to construction. However, InfraCo Africa also has the appetite and funding to continue growing. In December 2015, InfraCo Africa reaffirmed its ambitious commitment to doing more and signed a new Funding Agreement with the PIDG for £39m.
“We’ve spent the last 10 years building a strong foundation of projects and development capability. 2016 will see us leveraging that investment so that with the strong support of the PIDG and our shareholders we can do even more in the future” Alex Katon, Executive Director, InfraCo Africa
Now embarking on 2016, InfraCo Africa will be actively seeking new projects and new development partners while continuing to build its internal capabilities and further mobilise the collective strength of its sister PIDG Facilities.