June 23, 2022
British International Investment will invest up to 200 million USD into the joint venture between Norfund and Scatec to jointly provide capital to develop Africa’s hydropower sector. Norfund commits a further 100 million USD.
“It’s great to announce that BII is putting 160 million pounds into hydropower in Africa, creating 180,000 jobs,” said Prime Minister Boris Johnson when announcing the deal at the Commonwealth Business Forum in Rwanda. “I see a fantastic future for all of us in these initiatives. We want to be the partner of choice for our African friends as you transform millions of lives.”
Last year Norfund sold SN Power, a 20-year project which had become a powerful actor in hydropower in developing countries, to Scatec. As part of the agreement Norfund retained 49% ownership in the company’s portfolio in Africa as a joint venture. Now BII, the UK development finance institution, is joining the partnership.
Norfund has been developing hydropower since the fund’s inception. This will however be the largest investment in hydropower in BII’s 74-year history, with up to $200m of capital committed over the next several years. Norfund is seeding the partnership with their existing share in their joint venture with Scatec and further capital commitments of up to $100m over the next several years. The investment extends and compliments BII’s and Norfund’s existing commitments and partnerships to powering Africa, through Globeleq, a 2.3GW IPP company in which BII and Norfund are shareholders, and the joint investment the two development finance institutions have in H1 Capital – a South-African black-owned and managed renewables investment and development company.
Norfund and BII now together hold a 49% stake in Scatec’s African hydropower portfolio, which includes a mixture of operating assets as well as a number of assets under development, including the proposed 205MW Ruzizi III hydropower plant, which will provide power to Rwanda, Burundi and DRC, the 120MW Volobe hydropower plant in Madagascar and the 350MW Mpatamanga project in Malawi among others. All assets under development are aligned with the Paris agreement and demonstrate the partnership’s commitment to supporting the respective countries in their net zero pathways.
The projects are expected to support the creation of 180,000 jobs, avoid at least 270,000 tCO2e of GHG emissions annually, and could provide enough clean electricity to meet the equivalent demand of over 3 million people.
“If we are going to succeed at stopping climate change and fighting poverty, we must bring climate and development policies closer together. I am glad that the UK is now joining this work by creating renewable energy and economic growth in some of the poorest countries in Africa”
Minister of International Development Anne Beathe Tvinnereim.
“The expansion of dispatchable renewables is critical to support the integration of more wind and solar energy in Africa. 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,” says Mark Davis, Executive Vice President Clean Energy in Norfund.