GuarantCo provided a €3.8m 13-year Debt Service Reserve Account (DSRA) guarantee to Albatros Energy Mali.
The value of innovative blended financing for major infrastructure projects in Africa was demonstrated today with the opening of the 90MW Albatros Energy Mali (AEM) power station in Hawa-Dembaya district, Mali. The plant is expected to increase Mali’s effective base load electricity capacity by 25%, providing up to 4.5 million people with improved access to power and paving the way for new renewable energy facilities.
The €122 million power plant has the support of a €5.0 million, 15-year term conventional loan and a €3.8 million Sha’ria financing facility with a 14-year term from PIDG company the Emerging Africa Infrastructure Fund (EAIF). Other project lenders are the West African Development Bank, the Islamic Development Bank, the Islamic Corporation for the Development of the Private Sector and the OPEC Fund for International Development.
The project has drawn on support from other PIDG companies to ensure its success. PIDG’s Technical Assistance Facility (TAF) assisted AEM with $500,000 of funding to support legal and environmental studies. GuarantCo provided a €3.8m 13-year Debt Service Reserve Account (DSRA) guarantee to AEM.
By establishing this long-tenor DSRA guarantee, GuarantCo created a financial structure for the project which is unique to Mali and to the country’s energy sector. The significant benefit of the DRSA guarantee is that the legal obligation to reserve cash to service interest and principal payments on the debt, can now be used for other purposes.
AEM’s new power station is in the Kayes region of Western Mali, one of the country’s most important mining hubs. Mali’s economy will benefit from having a reduced power import bill, more reliable power for business and industry and see less need for rented mobile generating capacity.
Power from the AEM plant is being supplied to Mali’s national grid, bringing the country improved reliability of supply to major cities and low to medium voltage users. As large industries become connected to the grid the plant will contribute to their power needs. 381 local people were recruited to build the plant, which was delivered ahead of schedule. 50 of the plant’s 53 permanent staff were locally recruited.
EAIF Executive Director Emilio Cattaneo said:
“Electricity is the single most valuable element in bringing hope and opportunity to fragile states. The Albatros Energy plant can be an engine for sustained economic progress and improve the daily lives of many thousands of people. AEM, with the support of the PIDG companies, has delivered a private sector project of fundamental importance to Mali’s future.”
Albatros Energy Mali CEO Koenraad Beckers said:
"Working with the PIDG companies is of great value to us. They bring specialist expertise, innovative thinking and a determination to help us succeed in challenging environments."
Senior members of Mali’s government attended the inauguration event, and along with AEM Chairman, Amadou Sow and CEO Koenradd Beckers, oversaw the official opening. Emilio Cattaneo, Executive Director, attended on behalf of the Emerging Africa Infrastructure Fund (EAIF). Tania De Beers represented Investec, EAIF’s fund manager, and Alex Hazoury attended on behalf of GuarantCo.
In early 2018, the financing of the AEM project won the Deal of the Year award from African Utility Week and the Infrastructure Deal of the Year Award 2018 from Private Equity Africa. The AEM transaction marked EAIF’s infrastructure project in Mali, as well as its first Shar’ia financing transaction. EAIF’s second project in Mali, a 50MW solar power facility, recently reached financial close.
Using its own funds, AEM has set up a Social and Ethical Committee which aims to benefit the 9,100 people who live in the Hawa-Dembaya area. The initiative has already seen one medical doctor and two nurses hired to work in the community dispensary, provided a range of medical and pharmacy equipment, developed a drinking water masterplan for the Hawa-Dembaya community and planted 2.400 trees. AEM’s corporate social responsibility programme is designed to have beneficial long-term and sustainable impacts for the community.
For further information, please contact:
Martin Roche +44 771 574 9621
Investec Asset Management
Vian Sharif +44 207 597 1834
Kotie Basson +27 21 416 1812
Katharine Rooney +44 203 848 6761
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 mobilised $33.7bn from private sector investors and DFIs, supported 170 infrastructure projects to financial close and provided 231 million people with access to new or improved infrastructure. PIDG is funded by members from seven countries (UK, Switzerland, Australia, Norway, Sweden, Netherlands, Germany) and the World Bank Group. www.pidg.org
The Emerging Africa Infrastructure Fund provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in sub-Saharan Africa. Part of PIDG, EAIF is funded by the governments of the United Kingdom, The Netherlands, Switzerland, and Sweden. It raises its debt capital from public and private sources, including Allianz, the global insurance and financial services company; Standard Chartered Bank; the African Development Bank; the German development finance institution, KFW, and FMO, the Dutch development bank. 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 70 infrastructure projects across eight sectors in 21 sub-Saharan African countries. EAIF is managed by Investec Asset Management. www.eaif.com
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 US$141bn* 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. www.investecassetmanagement.com
*As at end December 2017
GuarantCo was established to mobilise local currency investment for infrastructure projects and support the development of financial markets in low income countries. Part of PIDG, GuarantCo is supported by the governments of the UK, Switzerland, the Netherlands, Sweden and Australia and is rated AA- by Fitch and A1 by Moody’s. www.guarantco.com
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