Actis launches $1.9bn African renewables platform

Emerging markets private equity investor Actis has launched the last renewables platform from its third energy fund – a $1.9 billion pan-African venture called Lekela Power, with long-time partner Mainstream Renewable Power.

The unveiling comes hot on the heels of last week’s launch of Ostro Energy, which aims to develop some 800MW of mostly wind power by 2019, powered by $230 million of equity from Actis. Lekela Power similarly plans to develop between 700MW and 900MW of solar and wind power across Africa over the next three years, using a combination of debt and equity.

Actis will own the majority (60 percent) of the new platform. Assuming the $1.9 billion of projects Lekela plans to develop will be financed on a regular project finance basis, the two partners might be committing some $570 million of equity to the platform, with Actis financing the lion’s share at $342 million.

Lekela will start with the three wind farms Actis and Mainstream recently reached financial close on. The projects, located in South Africa’s Northern Cape Province, are worth about $773 million and have a combined generating capacity of 360MW. In addition, the platform is already eyeing a pipeline of projects including a 225MW wind farm in Ghana, a 100MW wind farm in Egypt, and further wind and solar projects in South Africa.

“With soaring demand and funding constraints, Africa’s need for renewable energy is pressing. In South Africa for example, currently 95 percent of the country’s electricity is generated by coal-fired power stations. While the region has significant natural and fossil fuel resources a lack of long-term investment has led to a reliance on emergency and short-term diesel generation,” Actis partner and head of renewable energy Lucy Heintz said in a statement.

She added that “an improvement in the regulatory regime in many African countries has opened up the [renewables] sector for further investment”.

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