British International Investment, Norfund, Scatec invest US$200m in African hydropower

AFRICA – The UK government’s development finance institution British International Investment (BII) plans to invest US$200 million in a joint project with Norway’s Norfund to construct at least three hydroelectric power projects in Africa.

The two institutions will equally split a 49% shareholding in a joint venture with Norway’s Scatec ASA for the projects, BII said in a statement.

These will include the planned 205-megawatt (MW) Ruzizi III hydroelectric plant to supply electricity to Rwanda, Burundi and Democratic Republic of Congo, the 120 MW Volobe hydropower plant in Madagascar, and Malawi’s 350 MW Mpatamanga project, BII said.

“We are excited to have British International Investment join our venture with Norfund and this is testimony to the importance of hydropower across Africa, Terje Pilskog, CEO at Scatec, said.

“This strong partnership and investment by BII will support our concerted effort to boost the continent’s renewable energy drive and deliver affordable and clean energy to the world.”

This will be the largest investment in hydropower in BII’s 74-year history, with up to US$200 million of capital committed over the next several years.

British International Investment is helping to deliver on the UK’s vision for the Clean Green Initiative, by providing capital to power inclusive economic sustainability across Africa,” UK Minister for Africa, Vicky Ford, said.

Investing to bolster Africa’s hydropower sector is a strong step toward helping to meet the energy demands of three million people in countries most at risk to the impacts of the climate emergency.

“Through these projects, UK finance will enable job creation and drive clean productive growth across the continent.”

Norfund is seeding the partnership with their existing share in their joint venture with Scatec and further capital commitments of up to US$100 million over the next several years.

Hydropower is critical for providing clean baseload and peaking power, especially in landlocked countries in Africa, as the continent countries transition away from fossil fuels towards a net zero future,” Chris Chijiutomi, Managing Director, Head of Infrastructure Equity, Africa & Pakistan at BII, said.

“BII along with its partners will play a key role in providing inclusive and sustainable finance to support hydropower in sub-Saharan Africa. It is great that we are partnering with Norfund and Scatec in this partnership.”

The investment extends and compliments BII’s and Norfund’s existing commitments and partnerships to powering Africa, through Globeleq, a 2.3GW IPP company in which BII and Norfund are shareholders, and the joint investment the two development finance institutions have in H1 Capital – a South-African black-owned and managed renewables investment and development company.

“The expansion of dispatchable renewables is critical to support the integration of more wind and solar energy in Africa,” Mark Davis, Executive Vice President Clean Energy in Norfund, said.

“We are delighted to be able to join forces with BII in our partnership with Scatec, to further scale up our ability to provide clean and affordable energy through hydropower, enabling economic development and job creation, while avoiding emissions.”

Norfund was instrumental in building the company known as SN Power into a leading hydropower company in developing countries, which was then sold to the Norwegian renewable energy developer Scatec in January 2021.

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