Fundraising

Mainstream raises $117.5m for African renewables

IFC affiliates and two fund managers have backed the developer as it seeks to expand Lekela Power, a joint venture it launched last year alongside Actis.

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Mainstream Renewable Power has received a $117.5 million equity injection from investors including IFC, the IFC African, Latin American and Caribbean Fund (ALAC) and the IFC Catalyst Fund.

Still subject to shareholder approval, the deal aims to provide renewables platform Lekela Power with firepower to roll out further wind and solar plants. Also involved are Missouri-based Ascension Investment Management and South African fund manager Sanlam, which manage ALAC and the IFC Catalyst Fund alongside IFC Asset Management Company.

Last August, sister publication Low Carbon Energy Investor reported that Mainstream was targeting $240 million for the fundraising round, of which IFC was ready to commit $40 million. “We are bringing in a select number of investment partners that share our view about Africa’s renewables potential,” Mainstream managing director Barry Lynch explained then. “It’s a small group of family offices, impact investors and some institutional investors. More and more investors want a direct investment type of structure.”

Lekela Power was formed in February 2015 as a joint venture between Mainstream and emerging markets firm Actis, with the latter owning 60 percent of the business. At the time, the pan-African platform was looking to develop 700MW to 900MW of clean energy assets worth $1.9 billion.

Lekela is now aiming to build 1,300MW of new facilities by 2018, according to a statement released by IFC and Mainstream. The platform plans to construct four more wind farms in South Africa, two wind farms and a solar plant in Egypt, as well as wind farms in Senegal and Ghana, they said.

Mainstream and Actis have partnered on at least one other occasion: the 2013 creation of Aela Energía, a Chile-focused power platform in which the private equity firm also owns 60 percent. Actis also holds majority stakes in Globeleq Mesoamerica in Central America and Zuma Energía in Mexico, which were also established with the intent of building 600MW to 70MMW generating portfolios within a five-to-seven year time frame.

A similar logic was pursued when the firm bought a controlling position in Brazil’s Atlantic Energias Renováveis in 2013.