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AFC-Harith platform aiming for 6GW portfolio

The multilateral this week launched an industry association aimed at bolstering Africa’s project pipeline that is also backed by the likes of AIIM and Abraaj.

A power platform company established in June by the Africa Finance Corporation and fund manager Harith is hoping to grow its portfolio to 5-6GW over the next decade, according to the development bank’s chief.

The energy platform was created through the pooling of both investors’ power assets, allowing for the existence of a single $3.3 billion entity with 1,575MW in generation capacity.

Andrew Alli, AFC’s chief executive, told Infrastructure Investor that the move stemmed from the need to establish a structure that could sustainably develop power infrastructure facilities in African markets, which today remain largely financed on a project-by-project basis.

“In recent years, we’ve had an average of two IPPs closed per annum in Africa – excluding South Africa – amounting to less than 1GW. Such a project pipeline doesn’t move the dial,” Alli said.

It is with a similar objective that AFC is this week launching the Africa Infrastructure Development Association, a body bringing together developers, investors and financiers that aims to develop guidelines and industry standards for infrastructure projects in Africa. The organisation will also seek to promote capacity building in the sector through training and knowledge sharing, as well as serve as an interface with governments.

Its 10 founding members include Dutch development agency FMO, Africa Infrastructure Investment Managers, Abraaj Group, Germany’s DEG, law firm Trinity, early-stage funder InfracoAfrica, UK-based developer EleQtra and renewables investor Climate Change One.

Alli hopes the AFC-Harith platform will be able to capitalise on the pipeline unlocked by such initiatives, as well as on future technological improvements that could further reduce the cost of renewables and allow power to be stored. Green energy currently accounts for 20 percent of the platform’s capacity.

The AFC chief executive added that the tie-up, to which the lender has initially committed $100 million, is being designed with a view to eventually invest from its own balance sheet and borrow on its own behalf. He said the entity could, in due course, raise capital from third-party investors and be listed on the stock exchange.