Project detail - Africa REN DevCo. WIP

Africa REN DevCo. WIP

Status: Proposed investment
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Disclaimer

The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion.

In case of questions

This proposed investment is online for 30 days. In case of questions, please contact disclosure@fmo.nl

Who is our prospective client?

Africa REN AssetCo is a platform company that will be established. It is the intention that the Africa REN platform will grow into a larger IPP active in West Africa, owning and operating renewable energy projects. Africa REN will own and operate the Senergy 2 solar PV plant in Senegal (in operations), Kodeni Solar (a solar PV plant in Burkina Faso which will commence construction early 2021), and Walo Storage (solar-powered storage facility in Senegal which will commence construction mid 2021).

What is the funding objective?

FMO’s equity investment of EUR10.9m will be used towards their proportional acquisition of 60% of the equity rights in Senergy 2, 100% of Kodeni Solar and 90% Walo Storage. This financing will further facilitate the development, construction and operations of these projects, with total project costs up to EUR 77m. In addition, FMO will provide an additional EUR 2m to the Africa REN Development Company, which will be used to finance new development projects. This is a co-investment with FMO investee Metier Sustainable Capital International Fund II LP, who will become a shareholder in Africa REN AssetCo alongside FMO.

Why do we want to fund this project?

The Africa REN platform will aim to contribute to the development, construction and operations of (greenfield) renewable energy projects in low-income sub-Saharan countries. All projects owned by the Africa REN platform will provide clean and reliable electricity to countries which have low electrification rates, at lower prices than current thermal power stations. Africa REN thereby aims to secure diversification of the electricity mix, increase in (specifically rural) energy access, sustainable local employment and transfer of knowledge and competencies in the West African region. Africa REN is committed to sustainable development and to ensure that the environment and society at large benefit from their projects.

Environmental and social rationale

The investment’s E&S category is B+ due to the combination of contextual risks (e.g. human rights) and E&S risks, incl. land acquisition and biodiversity impacts, together with typical construction risks. PS1-6 are currently triggered for existing assets: further materialization of pipeline assets could potentially trigger PS7-8 as well, all subject to IFC PS-aligned E&S due diligence at the appropriate time. E&S risks may also stem from affiliated facilities where projects are (planned to be) situated. Mitigation comes from a strong E&S management system, extensive stakeholder engagement practices and overall management engagement in E&S risk management, together with appropriate consultancy support. Note that the investments of Africa REN are subject to ESIAs and inclusion of ESG risk mitigation in the management planning as well.

Region
Africa
Country
France
Sector
Energy
Publication date
2/18/2021
Total FMO financing
EUR 2.00 MLN
Fund
Access to Energy Fund
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)
B+