AfDB Invests with London Based Emerging Market Fund Manager for Renewable Energy Projects in sub-Saharan Africa

  • AfDB has invested US 25 million in a US 250 million renewable energy emerging market fund (ARPF) managed by London based Emerging Markets Partners Ltd.
  • ARPF will provide equity for the development and construction of 10 to 15 greenfield renewable energy projects in sub-Saharan Africa.
  • ARPF projects will focus on mature technologies including wind, solar PV, small to medium hydro, geothermal and biomass.

The board of directors of the African Development Bank Group (AfDB) has approved an equity investment of up to US 25 million in ARCH Africa Renewable Power Fund (ARPF), a US 250 million private equity fund for renewable energy projects across sub-Saharan Africa.

ARPF will provide equity for the development and construction of 10 to 15 greenfield renewable energy projects in sub-Saharan Africa, adding approximately 533MW of installed energy generation capacity from renewable sources in the region. This will provide both base load and peak load power in underserved markets.

ARPF projects will focus on mature technologies including wind, solar PV, small to medium hydro, geothermal and biomass. These would include grid-connected independent power producers (IPPs), and decentralised energy projects (commercial and industrial solar, mini-grids and solar home systems companies).

The Fund’s strategy is to prioritise projects with a clear timeline to financial close, with emphasis on de-risking early stage greenfield projects.  The Bank’s presence is expected to act as a catalyst for other investors to commit a further $60-75 million equity from non-DFI sources.

The AfDB would also ensure that the highest environmental and social standards, together with climate change and gender considerations, are applied to the ARPF’s projects.

“Energy investments in Africa are constrained by limited well-structured, bankable projects, as well as by unavailability of risk capital. Renewable technologies require additional support to be fully competitive over fossil fuel-based energy generation,” said Amadou Hott, the Bank’s Vice-President for power, energy, climate change & green growth.

“ARPF will expand the pipeline of bankable energy projects in Africa, and complement and deepen the work of the Bank in this critical area. This is vital for economic growth, and to foster transition to low carbon across the continent,” Hott added.

The Fund is expected to reach first close in early 2019. The ARPF anchor investing entity is ARCH Emerging Markets Partners Ltd, a London-based emerging market investment joint venture.

Author: GBA News Desk/ESI-Africa Contributor

This article was originally published on ESI Africa and is republished with permission with minor editorial changes.

 

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