LONDON — Mainstream Renewable Power Ltd., a Dublin-based clean-energy developer, and Actis LLP agreed to work together to develop $1.9 billion of solar and wind power projects across Africa.
Their venture, called Lekela Power, intends to provide 700 megawatts to 900 megawatts of wind and solar power by 2018 and is 40 percent owned by Mainstream and 60 percent by Actis, Barry Lynch, Mainstream’s managing director of onshore procurement, construction and operations, said today by e-mail. They expect an investment of about $1.9 billion, which is a combination of 30 percent equity and the remainder debt.
“With soaring demand and funding constraints, Africa’s need for renewable energy is pressing,” said Lucy Heintz, partner and head of renewable energy at Actis. “In South Africa for example, currently 95 percent of the country’s electricity is generated by coal-fired power stations. While the region has significant natural and fossil fuel resources a lack of long-term investment has led to a reliance on emergency and short-term diesel generation.”
Lekela will focus initially on South Africa, Ghana and Egypt. It’s also looking at opportunities in West Africa and countries neighbouring South Africa, Lynch said. Mainstream will be responsible for site identification, project development, construction management and operation and maintenance of the facilities.
Mainstream on Feb. 12 reached financial close on three wind farms totaling 360 megawatts in South Africa under the third round of the nation’s Renewable Energy Procurement Program. These will form the core of the Lekela venture. Mainstream will own 40 percent of these, said Lynch.
Mainstream also plans to transfer a 225-megawatt wind project in Ghana to Lekela once financial close is reached.
Other facilities are a mixture of projects Mainstream already has under development and some are opportunities that it’s “beginning to chase down,” Lynch said.
Copyright 2015 Bloomberg
Lead image: Rand via Shutterstock