Emerging Africa Infrastructure Fund announces first project in Mali
90MW power station to increase Mali’s effective base load electricity by 30%
The private sector Malian power plant operator, Albatros Energie Mali (AEM), is to build a 90MW HFO-fueled power station in the Kayes region of the country, adding 30% to Mali’s effective base load electricity capacity. The €123.1 million project has the support of a €5.8 million 15-year term conventional loan and €3.9 million Sha’ria financing facility with a 14-year term, both from the Emerging Africa Infrastructure Fund. It is the Fund’s first project in Mali.
Most of Mali’s locally generated electricity comes from hydro power stations, with a growing proportion supplied by conventional thermal fuels. In periods of drought or low rainfall, hydro becomes less reliable, plus Mali has a limited number of locations suitable for hydro stations. Given the low global oil price, which looks likely to continue, the AEM plant will be beaten on production and supply price only by hydro.
The new plant will also benefit the Mali economy by reducing its power import bill and cutting the need for renting mobile generating capacity. Power from the AEM plant will be supplied to Mali’s national grid and will initially improve reliability of supply to major cities and to low and medium voltage users. As large industries become connected to the grid, the plant will contribute to their power needs.
Construction is expected to take around 16 months. 183 local people are to be recruited to a total construction workforce of 191 people. When operational, the plant will employ 53 staff, 50 being locally engaged.
Mali is ranked among the 25 poorest countries in the world. In 2015, The African Development Bank reported that Mali’s electrification rates remain very low, at c55% in urban areas and c15% in rural towns and villages.
“Experience worldwide shows that creating a reliable electricity generating sector is the single most important element in helping fragile states fight poverty, build economic confidence and unlock human and commercial potential,”” says EAIF Executive Director, Emilio Cattaneo.
Mali becomes the 21st sub-Saharan country in which EAIF has made loans to private sector projects, since the Fund was set up in 2002.
“EAIF was established with the primary objective of stimulating economic development as a means of reducing poverty. Alleviating poverty is essential to a stable and progressive economic development, “added Mr Cattaneo.
EAIF is member of the Private Infrastructure Development Group (PIDG). Another PIDG business, GuarantCo is providing a 14 ½ year guarantee facility of €3.8 million to AEM’s Mali development. A third PIDG facility, the Technical Assistant Facility (TAF) assisted AEM with US$500,000 of funding towards project development costs.
Seven governments (and The World Bank) currently contribute funds to PIDG. In the case of EAIF, support comes from the governments of the UK, The Netherlands, Sweden and Switzerland, as well as private sector banks, the German development finance institution, KfW and its Dutch equivalent, FMO. GuarantCo is supported by the governments of Australia, the UK, Sweden, Switzerland and The Netherlands, through PIDG and the FMO, the Dutch development finance organisation.
EAIF is managed by Investec Asset Management (IAM), one of the largest third party investors in private equity, credit, public equity and sovereign debt across the African continent.
The Head of EAIF at Investec Asset Management, Nazmeera Moola, says,
“The financing of this project in Mali was structured to maximize access to both Western and Islamic financing. For the first time EAIF has participated in a project that includes an element of Sha’ria finance. This experience deepens and widens our existing strengths as a high-quality lender of choice to African infrastructure developers.”
The Emerging Africa Infrastructure Fund is funded by:
For further information, please contact:
Martin Roche +44(0)771 574 9621
Investec Asset Management
Vian Sharif +44 207 597 1834
Kotie Basson +27 21 416 1812
Rebecca Goding +44 (0)20 3058 3182
Notes to Editors
The Emerging Africa Infrastructure Fund
The Emerging Africa Infrastructure Fund provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in sub-Saharan Africa. Established and substantially funded by the governments of The Netherlands, Switzerland, Sweden and the United Kingdom, and with debt provided by the German development finance institution, KfW and its Dutch equivalent, FMO, the Fund works with private sector businesses, African and European banks and other development funds and agencies. It helps create the infrastructure framework that is essential to sustained economic stability, business confidence, job creation and poverty reduction. It has to date supported nearly 60 infrastructure projects across eight sectors in 20 sub-Saharan African countries.
The Private Infrastructure Development Group
The Private Infrastructure Development Group (PIDG) encourages and mobilises private investment in infrastructure in the frontier markets of sub-Saharan Africa, south and south-east Asia, to help promote economic development and combat poverty. Since 2002, PIDG has supported 133 infrastructure projects to financial close and provided 265 million people with access to new or improved infrastructure. PIDG is funded by donors from seven countries (UK, Switzerland, Australia, Norway, Sweden, Netherlands, Germany) and the World Bank Group.
About Investec Asset Management
Investec Asset Management is an independently managed subsidiary of Investec Group. Investec Asset Management is a specialist investment manager, providing a premier range of products to institutional and individual investors. Established in 1991, the firm has been built from start-up into an international business managing more than $119bn* on behalf of third party clients. The business has grown largely organically from domestic roots in Southern Africa to a position where we proudly serve a growing international client base from the Americas, the UK and Continental Europe, Asia, the Middle East, Australia and Africa. The firm seeks to create a profitable partnership between clients, shareholders and employees, and to exceed expectations for both client service and performance.
*As at end March 2017
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