Africa: €400 million being raised for renewable energy; 6.5 MW PV project underway07. December 2011 | Top News, Global PV markets, Markets & Trends | By: Becky Stuart
ix:Africa, with the help of European merchant bank, NextEnergy Capital, is planning to establish a €400 million to €550 million private equity impact fund, which will help develop renewable energy and clean technology projects in Africa. The two are also working on a 6.5 megawatt (MW) photovoltaic project in South Africa.
NextEnergy Capital (NEC) has begun fundraising for the African company, which is targeting U.S. and European investors through a subsidiary Rand fund, South Africa. According to a spokesperson, NEC and the Industrial Development Corporation (IDC) have both committed seed capital. They added that fundraising is expected to continue for the next 12 to 18 months.
Roughly 80 percent of the funds raised will be used for power generation and infrastructure projects, while the remaining 20 percent will be invested in pre-permit power plant development and in preparing early-stage clean technologies for the market.
The spokesperson told pv magazine that while photovoltaics will comprise a "major part of the fund", it is likely that other renewable technologies such as onshore wind, will be used.
Although no project specifics have been released, WiseEnergy Group has said that it will manage up to 500 MW worth of solar and wind projects in South Africa for ix:Africa. A local WiseEnergy Africa team is said to be working with the ix:Africa fund and the South African Government to review the potential for projects in the country, ahead of the next round of government project auctions in March 2012.
Furthermore, says NextEnergy, "a portion of the fund’s profits will go to a charitable foundation, diffusing impact investment in clean energy to other social initiatives, including in food, housing and health projects."
In addition to creating a private equity impact fund, ix:Africa is developing a 6.5 MW photovoltaic project. The spokesperson says that the project should be executed between April 2012 and January 2013, however the actual dates depend on the South African Government.
Located in the Waterberg region of South Africa, 300 kilometers north of Johannesburg, the system is projected to generate enough energy annually to power 74,000 households when complete. It is also expected that 355 jobs will be created during construction, including 85 long-term on-site positions.
The photovoltaic modules will come from Tenesol’s Western Cape manufacturing facility, which produces both mono- and poly-crystalline modules at an annual capacity of 120 MW.
Overall investment in the system is ZAR 200 million (€18 million). ix:Africa will own 57 percent of it and will invest ZAR 120 million. The remaining 43 percent will come from local investors, such as IDC. Finally, a Community Trust, said to be financed by the South African development bank through a dedicated line of credit, will hold a 21 percent stake.
"This showcase project has been developed to demonstrate the potential for impact investing to generate considerable social, economic and environmental dividends that will positively affect financial returns to investors," commented Stefano D.M. Sommadossi, founding partner at NextEnergy Capital and a senior executive at ix:Africa. "We know that an ethical approach to capital investment can deliver extremely attractive returns, especially in renewable energy. Ethics and returns can be symbiotic."
Adding another notch to its solar portfolio, ix:Africa has also acquired a 20 percent stake in African solar tracking solution, AfriTrak.
Expected to be used in the photovoltaic project, the spokesperson says that AfriTrak is a "manual dual axis tracking system with three seasonal adjustments and six daily adjustments". They add, "The current version is up to three kWp each depending on the nominal power of the modules installed … Nominal up-lift is up to +35 percent compared to round mounted fix solutions, with a nominal difference of –2/3 percent compared with fully automated two-axis trackers used as reference in Southern Italy."
AfriTrak’s goal is to develop 360 MW worth of installed photovoltaic capacity in the country over the next five years. There are, however, no concrete project details yet available.
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