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EU plugs €300m into African renewable projects

The bloc’s contribution forms part of what could turn out to be €4.8bn of investment alongside other development finance institutions.

The European Union has pledged €300 million to finance 19 renewable energy and transmission improvement projects in Africa.

The EU said that its contribution is expected to leverage total investments worth €4.8 billion and catalyse the development of 1.8GW of new electricity generation. The funding forms part of the bloc’s support for the Africa Renewable Energy Initiative, owned by African countries and managed by the African Development Bank.

Chief among the supported schemes is the Climate Investor One programme, run by the Netherland’s FMO and South African investment firm Phoenix InfraWorks. The initiative provides equity and debt financing to projects in emerging markets and the EU said it could support up to 1GW of projects in Africa, although its statement stressed this could be subject to change.

Other large projects set to be supported by EU funding include the 147MW Ruzizi III hydropower plant which will provide power to Rwanda, the Democratic Republic of Congo and Burundi. The site has a total cost of €528 million.

A 100MW solar project in Nigeria’s Bauchi state, for which a financial close is expected this summer, will also be supported by the EU. The plant is being developed by Globeleq Africa, the power firm bought by Nordfund and the UK’s CDC from Actis in 2015, with support from the ARM-Harith Infrastructure Fund, Nigeria’s first private equity infrastructure fund.

The EU added that its investments will be co-financed by development finance institutions including KfW, Private Infrastructure Development Group and Proparco. The various development banks are supporting the projects to help AREI achieve its goal of generating 10GW of new renewable power by 2020.