Bloomberg: Africa50 to Set Up Off-Grid Power, Green Infrastructure Funds
- Investor says the off-grid fund is a first for Africa
- Infrastructure fund, off-grid facility to raise $700 million
Africa50, a pan-continental infrastructure investor, is setting up the first region-wide investment vehicle dedicated to off-grid power companies and plans a $500 million fund to invest in climate-friendly projects.
The new funds at the investor, whose shareholders include the African Development Bank and Morocco’s central bank, come amid a drive by regional governments to boost access to electricity and shield against the impact of adverse weather caused by climate change. The World Bank and AfDB last month convened a conference to give momentum to a program to bring power to 300 million Africans by 2030.
The Alliance for Green Infrastructure in Africa fund will be the first of the new funds, Africa50 Chief Executive Officer Alain Ebobissé said in an interview at a conference in Tanzania. It will comprise a $400 million component for project development, another $100 million for project preparation, and will target sectors ranging from renewable energy to transport that limits greenhouse-gas emissions.
With such a fund, “you can catalyze $10 billion worth of investments,” he said. “The first close will be in the first half of the year.”
Separately, Casablanca-based Africa50 is setting up a $200 million fund to invest in companies providing so-called distributed renewable energy such as solar-powered mini-grids and home systems. The International Solar Alliance will sponsor the new fund, known as the Africa Solar Facility.
Africa50 is also planning a Nigeria-focused fund for distributed renewable energy with the Nigerian Sovereign Investment Authority and the United Nations-backed Sustainable Energy For All, though the partners have yet to decide its size.
It’s also holding talks with the World Bank and AfDB over deployment of the technologies, Ebobissé said.
The new initiatives represent a significant expansion for the investor that currently runs three facilities — Africa50-Project Development, Africa50-Project Finance and the Africa50 Infrastructure Acceleration Fund.
Sixteen African institutional investors — including sovereign wealth funds and commercial banks — provided capital for the infrastructure fund. The International Finance Corp. was the only non-regional backer.
The group plans to do more to tap the $2.3 trillion held by African institutions, Ebobissé said.
Over the last seven years, the group has invested in 28 projects in 27 African countries and currently has $1.1 billion in assets under management.
Africa50 is about to complete the financing of Africa’s first large-scale public-private partnership on electricity-transmission lines — a deal between Power Grid Corp. of India and Kenya’s government, Ebobissé said. It has signed memorandums of understanding to pursue similar projects in Mozambique, Tanzania and Gabon.
Source: Bloomberg
Author: Antony Sguazzin is a reporter for Bloomberg News based in Johannesburg, South Africa.
Category: Media Coverage