Nordic funds invest in renewable energy in Africa
Driving development through energy investments
Two new Nordic equity investments will support African countries to increase their clean energy production. The Nordic Development Fund and Norfund have approved a total of USD 19 million of equity investments in a responsAbility-managed Energy Holding focusing on Sub-Saharan African countries. Other investors in the company are Germany’s KfW and Switzerland’s responsAbility Investments AG.
The Energy Holding aims to increase the renewable energy supply in Sub-Saharan Africa in a responsible way while generating attractive, long-term and stable cash flows across a diversified portfolio of renewable energy plants. The company was created in December 2013 with the goal to invest in and co-develop small- and medium-sized renewable energy projects up to 50 MW at various stages of the project life cycle, from development and construction to operations.
A particular focus will be on the development stage and to facilitate bankable, long-term power purchase agreements with national grid operators. The current portfolio comprises 14 projects totalling about 160 MW in development across the region. Many of these projects fall under a feed-in tariff (FIT) programme with the local utility company as an off-taker, whereby tariffs are fixed by the government. The offering encompasses equity and quasi-equity financing. The company is managed by responsAbility Investments AG, a Zurich-based asset manager.
The company has established a Nairobi-based implementation team combining experienced power project developers with young, talented local staff. This team is developing a pipeline of projects in various African markets. These are mostly run-of-the-river hydropower projects.
Pasi Hellman, Managing Director of NDF, says: “NDF is proud to support renewable energy supply in Sub-Saharan Africa by focusing on the equity niche markets. The demand for energy is a key development challenge in Africa, and this project addresses the issue in a socially and environmentally responsible way. We will help to implement the projects in the pipeline and act as a catalyser for further investments by other development finance institutions as well as private investors.”
Kjell Roland, CEO at Norfund, says: “Investing in clean energy projects is a high priority for Norfund as access to energy is crucial for development and poverty reduction. This investment will give Norfund a 14% share in the holding company managed by responsAbility. In addition to being an investor, we are prepared to contribute with expertise by being an active owner and will appoint a qualified representative with board experience to the company’s board.”
Rochus Mommartz, CEO at responsAbility Investments, says: “Investment and co-development of renewable energy in small- and medium-sized projects – a niche area – in Sub-Saharan Africa are vital as they support local access to affordable clean energy and climate stability by reducing the carbon intensity of energy.”
responsAbility Investments AG
Ulli Janett, Media Relations
Telephone: +41 44 403 06 33
About responsAbility Investments AG (responsAbility.com)
responsAbility Investments AG is a leading asset manager in the field of development investments that offers professionally managed investment solutions to private, institutional and public investors. The company supplies debt and equity financing to firms in emerging economies and developing countries.
responsAbility currently has USD 3.2 billion of assets under management invested in over 550 companies in 97 countries. Founded in 2003, the company is headquartered in Zurich and has local offices in Bangkok, Hong Kong, Lima, Luxembourg, Mumbai, Nairobi, Oslo and Paris. Its shareholders include a number of reputable institutions in the Swiss financial market and its own employees. responsAbility is regulated by the Swiss Financial Market Supervisory Authority FINMA.
About the Energy Holding
The private company with limited liability was established in 2013 by responsAbility Investments AG in conjunction with the German Federal Ministry for Economic Cooperation and Development (BMZ) and the German development bank KfW with seed capital of USD 25.5 million that was invested by KfW on behalf of BMZ. It focuses on exploiting long-term opportunities in the renewable energy sector in Sub-Saharan Africa across multiple technologies. To achieve this, it invests in and develops small- to mid-scale power plants that have secure, long-term power purchase agreements with national grid operators or other creditworthy off-takers.
About the Nordic Development Fund (ndf.fi)
The Nordic Development Fund was established in 1988, is the joint development finance institution of the five Nordic countries – Denmark, Iceland, Finland, Norway and Sweden. The objective of NDF's operations is to facilitate climate-change investments in low-income countries. NDF finances projects usually in cooperation with bilateral, multilateral and other development institutions. The operations mirror the Nordic countries’ priorities in the areas of climate change and development. NDF flexibly uses grants and other forms of financing for climate-change mitigation and adaptation activities.
About Norfund (norfund.no)
Norfund is the Norwegian state-owned development finance institution mandated to develop sustainable enterprises in poor countries. Norfund invests in clean energy, financial institutions and agribusinesses. The main investment region is Sub-Saharan Africa, as well as selected countries in Asia and Latin America. Clean energy is the largest component of Norfund’s portfolio and includes investments in hydro, solar and wind power projects. By year-end 2016, Norfund had USD 1.9 billion in committed investments.
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