Eiser Infrastructure Partners LLP has been appointed investment advisor of a UK-government backed fund that will invest in renewables projects in least-developed countries in Africa.
Eiser will, together with UK developer and advisory firm Camco Clean Energy, originate and manage investments for Green Africa Power LLP (GAP), it announced yesterday (3 July).
They were selected through a competitive process that started in September 2013 and the procurement was conducted in line with EU procurement guidelines.
GAP has been backed with GBP 95m of initial funding from the UK government. It has been developed jointly by the Department of Energy and Climate Change and Department for International Development “to tackle specific constraints to private sector investment in renewable power generation in Africa”.
Its mandate is to offer loans to privately-owned renewables projects “in the most under-developed countries in Africa” to make the projects more investable for commercial lenders and equity investors.
The fund – which is actively pursuing funding from other potential development agencies – will provide mezzanine finance, Vivian Nicoli, a Partner at EISER, told InfraNews.
She added that there is a “strong pipeline” of planned projects, but many are struggling to reach financial close. The fund aims to target projects where there is a gap in financing to help them being brought to a close.
Camco Clean Energy, an AIM-listed company, has been involved with the development of renewables projects in a number of African countries, and has offices in Togo, Kenya, Tanzania and South Africa. Nicoli said that GAP would be allowed to invest in Camco’s projects as long as they meet the fund criteria and conflicts of interest are properly managed.
Camco Clean Energy was originally active mainly with emissions-reducing projects backed by the UN’s carbon market, some of which are renewables projects.
But, because of a collapse in the price of carbon credits, it has disposed or written off such investments in recent years and ramped up its focus on renewables and energy storage that are not part of the UN’s carbon market.
Nicoli said that GAP will “generally seek to avoid investments” in companies that focus on renewables projects under the carbon market.
GAP expects to start deploying funds to projects in Q4, and plans to commit all funds currently raised within the next three years.