UK investment fund pledges Sh2.3 billion in Africa clean energy drive
The United Kingdom government’s investment arm British International Investment (BII) has committed to channel Kes2.3 billion to support clean energy infrastructure in Africa.
BII has announced the investment in partnership with the Norwegian DFI Norfund’s Joint Venture with Scatec, a leading renewable energy provider that will go towards hydropower projects across Africa.
“Hydropower is critical for providing clean baseload and peaking power, especially in landlocked countries in Africa, as the continent countries transition away from fossil fuels towards a net-zero future,” said Chris Chijiutomi, the managing director, head of infrastructure equity, Africa and Pakistan at BII.
“BII along with its partners will play a key role in providing inclusive and sustainable finance to support hydropower in sub-Saharan Africa and it is great that we are partnering with Norfund and Scatec in this partnership.”
The investments are expected to support the creation of 180,000 jobs, cut the emission of at least 270,000 tonnes of greenhouse gas annually, and at full capacity could meet the clean energy demand of over three million people.
Some of the new projects that will be developed under the fund include the first tri-national PPP in Africa (Ruzizi III HPP) and Malawi’s largest power plant (Mpatamanga HPP) among others.
Norfund and BII now together hold a 49 percent stake in Scatec’s African hydropower portfolio, which includes a mixture of operating assets as well as a number of assets under development.
“The expansion of dispatchable renewables is critical to support the integration of more wind and solar energy in Africa,” said Mark Davis, Executive Vice President, Clean Energy, in Norfund.
“We are delighted to be able to join forces with BII in our partnership with Scatec, to further scale up our ability to provide clean and affordable energy through hydropower, enabling economic development and job creation, while avoiding emissions,” he said.
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BII is entering a new five-year strategy period. The new strategy will see it invest between £1.5 billion and £2 billion per annum, with at least 30 percent devoted to climate finance.
“British International Investment is helping to deliver on the UK’s vision for the Clean Green Initiative, by providing capital to power inclusive economic sustainability across Africa,” said UK Minister for Africa, Vicky Ford.
“Investing to bolster Africa’s hydropower sector is a strong step toward helping to meet the energy demands of three million people in countries most at risk to the impacts of the climate emergency,” she said.
Kenya is one of the leading markets in Africa where BII, formerly known as CDC Group, has maintained a presence over the last 74 years investing in private-sector growth and partnerships.
BII recently unveiled a five-year strategy that will see the DFI pursue investment opportunities in Kenya to raise productivity, help increase climate resilience and support a circular economy.
Today, BII has a portfolio of nearly GBP 500 million in Kenya, supporting 30 regional funds and more than 80 businesses, that in turn provide over 36,000 jobs. The DFI’s investments in Kenya, both direct and through various funds and intermediaries, cover a variety of sectors, from clean infrastructure and energy, to digital infrastructure, food and agriculture, financial services, and logistics.
These include supporting small businesses’ recovery from the Covid-19 pandemic with a Kes10 billion commitment through Equity Bank Kenya, the newly operational 52 MW Malindi solar project through a Kes7.7 billion commitment, and a Kes1.7 billion fund to improve crop yield and farmers’ incomes.
