A new Norwegian fund, Empower Invest, will contribute know-how and equity to implement solar PV, small hydro and hybrid plants, supporting projects in Africa that are, individually, too small for traditional project financing.
18th September 2019: A partnership of public and private investors signed today an agreement to carry out the first round of equity funding for in small and medium-sized (1-10 MW) clean energy plants, initially focusing on Africa.
The fund, Empower Invest, will contribute know-how and equity to implement solar PV, small hydro and hybrid plants, supporting projects that are, individually, too small for traditional project financing.
Once completed, Empower will raise green bonds to finance the portfolio of projects. The fund will invest in a "pipeline" of reserved projects prepared by the manager Empower New Energy, in Kenya, Rwanda, Ghana, Nigeria, Ethiopia and Tanzania, amongst others.
Urgent need for increased access to electricity
The power sector in Sub-Saharan Africa remains largely underdeveloped in terms of installed capacity, energy access and overall consumption. More than 600 million people lack access to energy, and in 2017, the 48 Sub-Saharan African countries, with a combined population of more than 1.1 billion, had less generating capacity installed than Spain.
The installed capacity is insufficient to meet current demand and power shortages are holding back economic growth and job creation. 40% of businesses cite access to energy as a major constraint to operations. Many utilities rely on expensive peak power provision such as diesel plants to alleviate the situation.
The proportion of renewables in the power sector in Sub Saharan Africa is still below 50%, and new coal-fired power plants are being built across the continent. The required new capacity should largely come from clean energy sources to mitigate climate change.
Norfund sees a huge need for increased investment in local clean energy production in Africa and developing countries in general. The collaboration with Empower will be an important platform for raising private capital for this market, says Norfund CEO Tellef Thorleifsson
Article about Empower Invest in the Norwegian newpaper "Dagens Næringsliv"