Project detail - AFRICA REN ENERGY S.A.

AFRICA REN ENERGY S.A.

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Who is our 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 end 2021), and Walo Storage (solar-powered storage facility in Senegal which will commence construction early 2022).

Funding objective

FMO?s equity investment of ca. EUR 11m will be used towards their proportional acquisition of 60% of the equity rights in Senergy 2, 100% of Kodeni Solar and ca. 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 majority shareholder in Africa REN AssetCo alongside FMO.

Why we 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.

More investments

Date Total FMO financing
9/20/2021 EUR 4.68 MLN
8/30/2021 EUR 0.82 MLN
8/30/2021 EUR 0.82 MLN
Region
Africa
Country
Africa
Sector
Energy
Signing date
9/20/2021
Total FMO financing
EUR 4.68 MLN
Fund
Building Prospects
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+