The Emerging Africa Infrastructure Fund (EAIF), which is part of the Private Infrastructure Development Group (PIDG) (
www.PIDG.org), confirmed its leading position as a provider of debt funding to Africa’s alternative energy generation sector. EAIF has provided a US$35 million loan over a 15-year term to the 40MW Kesses solar generation facility to be built near Eldoret in the Rift Valley region of Kenya. The project will cost a total of US$87 million. The first part of the loan was disbursed to Alten Kenya Solarfarms BV (Alten), the Kenyan business of the Alten Group, in late December 2021.
Kenya has become the 9
th African country where EAIF has supported renewable energy projects in recent years. The others are Burkina Faso, Cameroon, Côte d’Ivoire, Mali, Mozambique, Rwanda, Tanzania and Uganda.
Commenting on the project, Sine Zulu, an Investment Specialist at EAIF’s investment managers, Ninety One, says:
“The Kesses plant brings multiple benefits to Kenya’s economic development. It will also play an important part in combatting climate change and strengthening Kenya’s ability to recover from Covid-19. EAIF is now established as a lender of choice for renewable energy companies investing in Africa.”
Alten Energías Renovables Group is an independent power producer (IPP) with international know-how in developing, financing and operating photovoltaic solar power plants in Sub-Saharan Africa, Central America and Europe. Alten will sell all its output to Kenya Power and Lighting Company (KPLC), the national energy utility, on a 20-year take-or-pay Power Purchase Agreement. Construction of the plant has already commenced and is expected to be completed in Spring this year.
Standard Bank, which is also a long-established lender to EAIF, was the mandated lead arranger of the project finance to Alten. Standard Bank is supplying US$41 million in debt comprising a term loan, VAT and Debt Service Reserve facility. Standard Bank is acting through its CIB and Stanbic Bank Kenya Limited divisions.
“With the Kesses Project, Standard Bank has been able to provide continued support to the use of clean energy across the African continent allowing for a more sustainable future. This is the second project Standard Bank has funded with the Alten Group and we were pleased to be able to bring in and partner with EAIF for the funding,” says Sherrill Byrne, Executive Energy and Infrastructure Finance at Standard Bank.
Building the Kesses plant will improve access to energy for thousands of people supporting SDG 7 and create up to 400 construction jobs, with 15 permanent jobs during operations.
Eldoret has the largest population concentration in the Rift Valley area region. It is a centre for local government, higher education, business and financial services, textile manufacturing, agribusiness and sports tourism. According to the World Bank, prior to Covid-19, the Kenyan economy grew at over 6% in 2018. Meeting the growing demand for energy is essential to sustaining economic progress and accelerating economic recovery from the pandemic.
Advisers to the LendersInternational Legal Counsel : Herbert Smith Freehills;
Local Legal Counsel : Iseme, Kamau & Maema Advocates (for Kenya) and NautaDutilh N.V (for the Netherlands);Technical and E&S Advisor : Lahmeyer International;<
Model Audit : PWC
Insurance Advisor/Broker; Indecs
Insurance Consultants (Broker: Willis Towers Watson);
Local Tax Advisors : PWC
About EAIF:The Emerging Africa Infrastructure Fund provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in Africa and parts of the Levant. 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 over 80 completed infrastructure projects across nine sectors in over 20 African countries. At the end of 2020 EAIF had a committed loan book portfolio of over US$1 billion. EAIF is part of PIDG. EAIF was established and substantially funded by the governments of the United Kingdom, The Netherlands, Switzerland, and Sweden. It raises its debt capital from public and private sources, including Allianz, the global insurance and financial services company; Standard Chartered Bank; the African Development Bank; the German development finance institution, KFW,and FMO, the Dutch development bank. EAIF is managed by Ninety One.
www.EAIF.comAbout PIDG:The Private Infrastructure Development Group (PIDG) is an innovative infrastructure development and finance organisation which encourages and mobilises private investment in pioneering infrastructure in the frontier markets of sub-Saharan Africa and south and south-east Asia to promote economic development and combat poverty. PIDG delivers its ambition in line with its values of opportunity, accountability, safety, integrity and impact. Since 2002, PIDG has supported 157 infrastructure projects to financial close and provided 209 million people with access to new or improved infrastructure. PIDG is funded by six governments (the UK, the Netherlands, Switzerland, Australia, Sweden, Germany) and the IFC. PIDG TA can provide technical assistance and capital grants to the PIDG companies to meet a range of needs associated with an infrastructure project’s life-cycle. PIDG TA can also provide up-front viability gap funding grants to support PIDG projects that require concessional funding to make a project with strong development impact financeable.
www.PIDG.orgAbout Ninety One: Ninety One is one of the largest third party investors in private equity, credit, public equity and sovereign debt across the African continent. The Emerging Africa Infrastructure Fund (EAIF) is managed by and fully integrated into Ninety One’s African investment platform. Ninety One manages the entire process on behalf of the EAIF. It markets the Fund, seeks projects, evaluates loan applications, including due diligence, manages transaction administration and monitors the loan portfolio. Since May 2016, when it was awarded the management mandate, Ninety One and its EAIF team have closed over 20 infrastructure transactions with a capital value of USD 650m. The team also led EAIF’s last round of fundraising, raising US$385 million, including US$100 million from Allianz Global Investors and US$50 million from Standard Chartered, a long-standing lender to EAIF.
Ninety One is an independent, active global asset manager listed on the London and Johannesburg stock exchanges. Established in South Africa in 1991, as Investec Asset Management, the firm was a pioneer in emerging markets in Africa. In 2020, almost three decades of organic growth later, the firm de-merged from Investec Group and became Ninety One. Today, Ninety One offers distinctive, active strategies across equities, fixed income, multi-asset and alternative investments to institutions, advisors and individual investors around the world.
www.NinetyOne.com
