Three Private Infrastructure Development Group companies contribute to financing
The Emerging Africa Infrastructure Fund (EAIF), which is part of the Private Infrastructure Development Group (PIDG), and Akuo Energy, the leading French green IPP, today announce the signing of financing of the Akuo Kita Solar power plant, to be built at Kita in southern Mali. It will be the first photovoltaic power station in Mali owned and run by a private sector independent power producer. Two other PIDG companies, GuarantCo and Green Africa Power (GAP) contributed to the project financing.
The €78 million, 50MW project includes transmission infrastructure connecting into the local electricity grid. It will be the largest solar farm yet built in West Africa. Akuo Kita Solar will sell its power to Electricité du Mali SA, the national utility, under a 28-year power-purchase-agreement.
Up to 400 people, including 20 managers, will be employed during the 12-month construction period. When operational, the Kita plant will have 30 permanent staff, all of whom are expected to be from Mali.
EAIF, the Mandated Lead Arranger (MLA) on the Akuo Kita Solar project financing, has arranged the senior debt facility for a total of €54 million over 15 years. EAIF’s share of the debt package is €17 million. The transaction was co-arranged with the Banque Ouest Africaine de Développement (BOAD). The other senior debt providers are FMO, the Dutch development finance institution and Banque Nationale de Développement Agricole (BNDA). GAP is providing a mezzanine facility of €8 million over 20 years and GuarantCo a Debt Service Reserve Account (“DSRA”) guarantee. The project marks EAIF’s first Mandated Lead Arranger role in a French-speaking African country.
PIDG is funded by donors from seven countries (UK, Switzerland, Australia, Norway, Sweden, Netherlands, Germany) and the World Bank Group. In the case of EAIF, funding comes from the governments of the UK, The Netherlands, Sweden and Switzerland, as well as private sector banks, the German development finance institution, KfW and its Dutch equivalent, FMO. GuarantCo is funded by the governments of Australia, the UK, Sweden, Switzerland and The Netherlands. And GAP is funded by the UK and Norway.
Akuo Energy is recognised for its expertise in project design and production technologies that bring many benefits to the communities it works in. Akuo Energy aims to establish a portfolio in Africa of around one gigawatt in the medium term.
EAIF Executive Director, Emilio Cattaneo, says Mali has realised that its abundance of sunshine makes solar power a critical asset in accelerating the country’s rate of electrification.
“Mali’s population is expected to double from c18 million to around 36 million people by 2035. It is estimated that fewer than 5 million people have access to electricity. As the population grows and becomes more urban, lifting the rate of electrification will be essential to social cohesion, stimulating economic activity, alleviating poverty and helping secure political stability. Solar generation facilities have the ability to be built quickly and in numerous locations. Akuo Kita Solar has seen the potential and I hope many other developers follow its lead,” says Mr Cattaneo.
GuarantCo Chief Executive Lasitha Perera said: “Akuo Kita Solar is the second power project in Mali to benefit from a DSRA guarantee from GuarantCo this year and demonstrates the critical role that credit enhancement can play in improving the viability of essential infrastructure. GuarantCo is delighted to have partnered with its fellow PIDG companies, EAIF and GAP, to deliver this ground-breaking project that highlights the depth and breadth of the PIDG.”
EAIF is managed by Investec Asset Management (IAM), one of the largest third-party investors in private equity, credit, public equity and sovereign debt across the African continent.
Head of EAIF at Investec Asset Management, Nazmeera Moola, says: “As Mandated Lead Arranger, we were able to move quickly to carry out all the due diligence, attract other debt providers and conclude negotiations. Our ever-deepening experience of energy projects means we can save huge amounts of time for our clients and financial partners. We are making beneficial and efficient use of the funds provided by our donors and lenders.”
GAP Executive Director Peter Hutchinson said: “The successful closing of the Akuo Kita financing demonstrates the need for a blend of different financial instruments. This could serve as a good template for future solar schemes.”
GAP received investment advice from EISER Infrastructure Partners LLP.
Akuo Kita is EAIF’s second project in Mali. In June 2017, it announced its backing for Albatros Energie Mali, which is building a 90MW HFO-fueled power station in the country.
Advisers to the lending group
Legal DD: Norton Rose. Local counsel: Jurifis. Technical and E&S DD: Sgurr Energy. Insurance DD: Marsh. Model and tax audit: BDO
The Emerging Africa Infrastructure Fund, GuarantCo and Green Africa Power are funded by:
For further information, please contact:
+44 7715 749621
PIDG and GAP
+44 20 3058 3182
+ 31 6 2117 8964
Notes to Editors
About The Private Infrastructure Development Group
The Private Infrastructure Development Group (PIDG) encourages and mobilises private investment in infrastructure in the frontier markets of sub-Saharan Africa, south and south-east Asia, to help promote economic development and combat poverty. Since 2002, PIDG has mobilised US$31.4bn from private sector investors and DFIs, supported 154 infrastructure projects to financial close and provided 222 million people with access to new or improved infrastructure. PIDG is funded by donors from seven countries (UK, Switzerland, Australia, Norway, Sweden, Netherlands, Germany) and the World Bank Group. www.pidg.org
About The Emerging Africa Infrastructure Fund
The Emerging Africa Infrastructure Fund provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in sub-Saharan Africa. Established and substantially funded by the governments of the United Kingdom, The Netherlands, Switzerland, and Sweden, the German development finance institution, KFW and its Dutch equivalent, FMO. The Fund helps create the infrastructure framework that is essential to sustained economic stability, business confidence, job creation and poverty reduction. It has to date supported nearly 60 infrastructure projects across eight sectors in 21 sub-Saharan African countries. www.eaif.com
GAP’s aim is to stimulate private investment in renewable energy power generation projects in developing countries in sub-Saharan Africa, to reduce reliance on fossil fuels through diversification into renewable energy. Founded in 2013, the specialised finance facility can invest intermediate capital (quasi-equity/mezzanine finance) in renewable energy projects. GAP is designed to stimulate the private sector appetite for investments in ‘greenfield’ infrastructure. A member of the Private Infrastructure Development Group, GAP is funded by the UK Department for International Development, the UK Department for Business, Energy & Industrial Strategy and the Norway Ministry of Foreign Affairs. www.greenafricapower.com
GuarantCo provides local currency guarantees to regional banks and bond investors, to help infrastructure projects raise debt finance. Founded in 2006 by PIDG, GuarantCo has to date provided 41 guarantees to a total value of around US$700m, supporting water, road and rural electrification projects in Africa and Asia Although GuarantCo can provide dollar-denominated guarantees in fragile and conflict-affected states its secondary mission is to ‘de-dollarise’ infrastructure projects to help local capital markets develop. GuarantCo is one-of-a-kind – the only local currency guarantee facility in the world targeting infrastructure in frontier markets. GuarantCo is funded by the UK (DFID), Switzerland (SECO), Sweden (Sida), the Netherlands (DGIS through FMO) and Australia (DFAT). www.guarantco.com
About Investec Asset Management
Investec Asset Management is an independently managed subsidiary of Investec Group. Investec Asset Management is a specialist investment manager, providing a premier range of products to institutional and individual investors. Established in 1991, the firm has been built from start-up into an international business managing more than US$119bn on behalf of third party clients. The business has grown largely organically from domestic roots in Southern Africa to a position where we proudly serve a growing international client base from the Americas, the UK and Continental Europe, Asia, the Middle East, Australia and Africa. The firm seeks to create a profitable partnership between clients, shareholders and employees, and to exceed expectations for both client service and performance. www.investecassetmanagement.com
Green Africa Power is advised by EISER Infrastructure Partners LLP (EISER). EISER is an independent infrastructure fund manager that combines deep infrastructure experience with strong financial expertise. EISER invests in quality infrastructure assets in the energy (including renewables), transport and environmental sectors. EISER is authorised and regulated by the Financial Conduct Authority. www.eiserinfrastructure.com
PIDG - Evolving to deliver greater development impact
GuarantCo’s parent company, The Private Infrastructure Development Group (PIDG), is changing.
A new governance structure will formalise and embed collaborative working between GuarantCo and all of PIDG’s companies. Our combined offer allows us to invest at different stages of the development cycle, bringing more projects from concept to reality in the world’s lowest income countries.
Read our joint op-ed to find out more.