A partnership of public and private investors today signed an agreement to carry out the first round of equity funding for small and medium-sized (1-10 MW) clean energy plants, initially focusing on Africa.
Titled Empower Invest, the fund will contribute to the know-how and equity to implement solar PV, small hydro and hybrid plants.
It will support 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.
The initiators behind Empower Invest, which is registered with the Financial Supervisory Authority in Norway as an Alternative Investment Fund (AIF), targets to raise $50 million.
The company today successfully closed the Series A funding, $8 million, which will enable the construction of the first projects starting this year.
"It is amazing that we now have succeeded to raise an equity fund that focuses on local solar PV, hybrid and hydro projects. This is the first fund of its kind, and most needed. " said Terje Osmundsen, founder and CEO of Empower New Energy.
Investment in local clean energy production
“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” stated Norfund CEO Tellef Thorleifsson.
Dominiek Deconinck, Manager of ElectriFI also commented: “ElectriFi is an EU-funded facility which invests in companies and funds with great potential to effectively contribute to develop clean energy solutions and contribute to sustainable development in emerging countries.
“We’re thrilled to support the ambitions of the Empower Fund's business model over the next decade to generate more than 600GWh of clean energy per year, enabling the reduction of 320 000 tCO2 emissions per year and creating thousands of new jobs and electricity connections.”
Also commenting on the development, Stig Grimsgaard Andersen, private investor, said: “If impact-investing is to make a difference, it is important that the investments create value for both financial investors, local communities and the environment. We believe the Empower Fund is an important innovation in this area.”
Lastly, Harald Magnus Andreassen, chief economist and one of the private investors, noted that local projects and smaller investment amounts receive little attention from international investors and lenders.
However, “the Empower Fund is an important initiative to cover this gap in the market,” said Andreaseen.
Series B issue of approximately $40 million is planned for 2020.
Investors in the Series A share issue include two public development funds - Norfund and ElectriFI - as well as a group of Norwegian private investors, including small power developer Malthe Winje, the family Elisabeth Grieg and Stig Grimsgaard Andersen, Dr Magne Orgland, Harald Magnus Andreassen, Svein Tveitdal and others.