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08 June 2017

Emerging Africa Infrastructure Fund backs US$76 million 40MW solar farm in Mozambique

Project key to development strategy for SMEs in rural Mocuba region

The Emerging Africa Infrastructure Fund (EAIF / the Fund), which is part of the Private Infrastructure Development Group, has signed a Participation Agreement with the International Finance Corporation (IFC) to provide a US$16.9 million B Loan, with a +16-year term, to Central Solar de Mocuba (CESOM), the private sector developer of the Mocuba solar farm in Northern Mozambique. In addition, EAIF is directly providing a US$7m Viability Gap Funding Grant for the Project raised from the Technical Assistance Facility (TAF) of the PIDG. The US$76 million plant is due to be completed in mid-2018. It will be a core element in the Mozambique government’s strategy of incentivising the creation of small and medium-sized businesses in the mainly rural Mocuba area.

EAIF’s umbrella organisation is the Private Infrastructure Development Group (PIDG). 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.

CESOM has been created to build and operate the Mocuba plant. Its owners are Scatec Solar, an established independent power producer with a portfolio of 322 MW in Africa, Europe and the Central America; Electricidade de Mozambique (EDM), the national electricity utility and Norfund, the Norwegian Investment Fund. EAIF has previously supported a SCATEC/Norfund solar development in Rwanda. CESCOM has agreed a long-term supply arrangement with EDM.

CESOM’s Mocuba facility will be the largest solar farm and the first utility scale solar plant yet built in sub-Saharan Africa (outside South Africa). In total, some 175,000 households in the immediate region and other parts of the country will be supplied with electricity from the plant, via Mozambique’s national grid. Output is estimated to be c.80,000 megawatt hours per year. Mocuba will account for c.4.8% of Mozambique’s currently available electricity capacity, but c.40% of the capacity of its Northern grid. 335 locally engaged people are to build the plant and further 13 people will have jobs when it is operational.

Accelerating economic development is central to meeting the needs and unlocking Mozambique’s potential, especially the 45% if its people under the age of 15. The country’s total population is estimated at c.26 million.

“Mozambique is a country of abundant natural resources, vast areas of unused agricultural land and millions of young people who, given the right opportunities, can transform the country into an African powerhouse. Increasing energy production and availability is fundamental to faster economic development, building business confidence, fostering skills and encouraging social and political stability,” says EAIF Executive Director, Emilio Cattaneo.

By locating the Mocuba facility at the centre of the grid serving Northern Mozambique, the daytime electricity system will be more stable and security of supply improved. Introducing solar power also reduces the country’s high dependence on hydro power. The price of power from the Mocuba plant is forecast to be at reasonable levels for the Mozambique market.

Mikkel Tørud, Scatec Solar’s CFO says, “Working with EAIF and Investec Asset Management brought us high levels of expertise, commitment and engagement with a project that has the potential to help many people out of long-term poverty. Their raising of the Viability Gap Funding Grant from the Technical Assistance Facility of the PIDG, also directly helps reduce the tariff to be paid by EDM as off-taker and thus the end user.”

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.

“Loans from conventional commercial lenders to projects in fragile states like Mozambique are infrequent and often simply unavailable. Without support from highly specialist and focused funds like EAIF, catalytic progress in difficult investment climates would be often impossible. In this case, we are working with an established and experienced client and a government focused on creating a stronger electricity sector to facilitate jobs, business creation and greater social cohesion,”” says Nazmeera Moola, head of EAIF at Investec Asset Management.

ENDS

For further information please contact:

EAIF

Martin Roche +44(0)771 574 9621

wmartinroche@btinternet.com

Investec Asset Management

Kotie Basson +27 21 416 1812

kotie.basson@investecmail.com

PIDG

Rebecca Goding +44 (0)20 3058 3182

rebecca.goding@pidg.org

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, the German development finance institution, KfW and its Dutch equivalent, FMO. The Fund 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.

www.eaif.com

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.

www.pidg.org

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 R1.6 trillion * 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 September 2016

www.investecassetmanagement.com

June 2017

Life-changing infrastructure helps 31m people in Africa and Asia

The Private Infrastructure Development Group opened up access to life-changing infrastructure designed to boost economies and combat poverty for 31 million people, last year.

June 2017

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.

June 2017

EAIF manager wins Credit Deal of the Year award for IHS Nigeria US$800 million bond issue

At an awards ceremony at London’s Savoy Hotel on 1st June, the Emerging Africa Infrastructure Fund (EAIF), shared in the congratulations when its manager, Investec Asset Management, won the Credit Deal of the Year award from Private Equity Africa. The award marks the successful US$800 million bond issue by IHS, one of Nigeria’s leading telecommunications businesses. EAIF invested US$50 million in the bond.

June 2017

Emerging Africa Infrastructure Fund backs better future for Senegal with €6.6 million loan to expand power station

Tobene ll expansion to raise output by 19MW to 115MW

In a boost to the independent power sector in Senegal, the Emerging Africa Infrastructure Fund (EAIF) is increasing its lending to Melec PowerGen (Matelec Group), the owner and operator of the Tobene power station in Senegal. The new B loan of €6.6 million is part of the financing of an expansion of the plant. The first phase, which EAIF also lent to, was completed on time and within budget. It began producing power in 2016.

May 2017

Bond issue supported by EAIF as anchor investor wins prestigious award from The African Banker Magazine

The Emerging Africa Infrastructure Fund (EAIF) is pleased to congratulate Standard Bank on winning The African Banker Magazine’s” Debt Deal of the Year Award”. Standard Bank led the successful US$600 million Helios Towers Africa (HTA) bond issue. HTA is a leading telecommunications infrastructure and power operator in Africa. Following the bond issue, it is set for expansion.

Media Enquiries

Please address all media related enquiries to:


EAIF Media Contact
media@eaif.com

Investec Media Contact
Vian Sharif
UK, Europe, America and Asia
Woolgate Exchange, 25 Basinghall Street, London, EC2V 5HA
Tel: +44 (0)20 7597 1834
Email: Vian.Sharif@investecmail.com

Kotie Basson
South Africa, Africa and Middle East
36 Hans Strijdom Avenue Foreshore Cape Town 8001
Tel: +27 (0)21 416 1812
Email: Kotie.Basson@investecmail.com