New energy investments planned for African power projects

Gulf News reported that the privately funded investment vehicle, Access Infra Africa, plans to build a portfolio of power assets in Africa worth in excess of $500 million over the next three to five years.

The joint-venture has been set up with Eren taking a 20% stake in Access Power and a seat on the board.

Access Power chairman Reda El Chaar told Gulf News: “Our portfolio will definitely be more weighted to renewables than conventional power but there is nothing by mandate that prevents us from doing conventional power.”

In exchange for the equity stake and board seat Eren will put up 70% of the costs to achieve its African portfolio target with the remaining 30% coming from Access Power, El Chaar said.

El Chaar said the partners are looking towards “an aggressive expansion plan over the next five years that will probably show additional funding from many different sources coming into Access, possibly as equity or debt or a mix”.

Last month, Access Power won a contract to build a $17m solar park in Uganda. The firm has also been pre-qualified by Egypt’s government to develop wind and solar plants there.

Last year, a ministerial-level International Monetary Fund (IMF) conference was told that the creation of a “large portfolio of bankable infrastructure projects” in central Africa would trigger increased contributions from the sub-regional banking sector and the capital markets. However, the IMF said infrastructure development must be accompanied by structural reforms to “promote a strong private investment climate”.

Last March, the African Development Bank welcomed the launch of the African Renewable Energy Fund (AREF) as an example of how private investment can be channelled to a key development sector.

AREF, a dedicated renewable energy fund focused on sub-Saharan Africa, closed on 12 March with $100m of committed capital to support small- to medium-scale independent power producers.