Financing has been agreed for the €78mn Akuo Kita solar power plant in Mali, the largest solar farm to be built in West Africa.
Akuo Energy, a leading French independent renewable energy provider, will develop the 50MW project, which includes transmission infrastructure connecting into the local electricity grid. It will be located at Kita in southern Mali and is the first photovoltaic power station in the country to be owned and run by a private sector independent power producer. Akuo will sell its power to Mali’s national utility under a 28-year power purchase agreement.
Funding for the project was co-arranged by the Emerging Africa Infrastructure Fund (EAIF), part of the Private Infrastructure Development Group (PIDG), and the West African Development Bank.
Among the financing deals signed is a senior debt package for a total of €54mn over 15 years. EAIF’s share of the debt facility is €17mn. The other senior debt providers are the Dutch development bank FMO and Malian development bank Banque Nationale de Développement Agricole (BNDA), but the exact debt provided from each party has not been disclosed.
Two other PIDG companies, GuarantCo and Green Africa Power (GAP), are also contributing to the project financing: GAP with a mezzanine facility of €8mn over 20 years and GuarantCo with a debt service reserve account guarantee.
According to GAP executive director Peter Hutchinson, this blend of different financial instruments could “serve as a good template for future solar schemes”.
A spokesperson for EAIF tells GTR the project is expected to reach financial close within the next two months, after which construction will commence.
Up to 400 people will be employed during the 12-month construction period, and, when operational, the plant will have 30 permanent staff.
EAIF is managed by Investec Asset Management (IAM). IAM’s head of the project, Nazmeera Moola, says: “As mandated lead arranger, we were able to move quickly to carry out all the due diligence, attract other debt providers and conclude negotiations. Our ever-deepening experience of energy projects means we can save huge amounts of time for our clients and financial partners. We are making beneficial and efficient use of the funds provided by our donors and lenders.”
EAIF is funded by the governments of the UK, the Netherlands, Sweden and Switzerland, as well as private sector banks, FMO and the German development bank KfW. GuarantCo is funded by the governments of Australia, the UK, Sweden, Switzerland and the Netherlands, while GAP is funded by the UK and Norway.