Rockefeller fund makes first investment in renewable energy in Africa
The Rockefeller Brothers Fund
(RBF) is financing its first clean energy project as it
divests
a multi-billion dollar fossil fuel portfolio in favour of impact investment. The fund is providing US$10 million to bolster developer
Mainstream Renewable Power
’s goal of expanding renewable energy in Africa. The financing forms part of a larger US$117.5 million investment deal involving the
International Finance Corporation
(IFC), among other institutions. The total installed generation capacity of Africa’s 48 sub-Saharan countries is just 68 gigawatts, around the same capacity as the whole of Spain, according to the
African Development Bank
(AfDB). The bank claims the average rate of electricity consumption per capita in sub-Saharan Africa is no more than 124 kilowatt-hours a year, a rate less than 1 percent of that achieved in high-income countries, and even less than the amount needed to power one light bulb for six hours per person. The RBF first set out to unwind its non-renewable energy projects in September 2014. According to a
statement
released by the fund on 23rd June 2016, it will shed a full 100 percent of its exposure to fossil fuels, including toxic oil and tar sands, in order to replace these with large-scale renewable energy investments. Eddie O’Connor, chief executive officer at Mainstream Renewable Power, said that the fund’s commitment to the
Lekela Power Platform
project, which plans to build over 1.3 gigawatts (GW) of wind and solar plants in Africa by 2018 is the “first investment of many from impact investors in this sector”. The deal aims at a wider goal of financing up to US$1.9 billion of green energy across African countries. Following a meeting with
Egypt’s president Al-Sisi
on 4th November 2015,
Leela Power signed a Memorandum of Understanding
(MoU) for a US$350m wind power station with a capacity of 250 megawatts (MW) located in Egypt’s Gulf of Suez area. Lekela Power is 60 percent owned by emerging markets investor
Actis
, which states its investment approach attempts to marry increasing domestic consumption in developing countries to better physical and social infrastructure. The Lukela Power Platform’s portfolio includes more than 1,340MW of solar and wind projects at various stages of development and construction. Jean-Marie Masse, chief investment officer of Global Equities at the IFC, told
Development Finance
: “The beauty of renewable energy is that, when you’re financing a project, you still have to consider the price of oil in the price-per-kilowatt agreement, but its influence is much more diminished relative to traditional energy financing.”
By Jack Aldane
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Photo: Patrick Bentley