Actis, a leading emerging markets private equity firm, has recently completed its second sale of an African renewable power platform in 2021. This sale highlights the growing interest and investment in the renewable energy sector in Africa, as well as the success of Actis in identifying and developing attractive investment opportunities in the region.
The platform, known as Lekela Power, was established by Actis in 2015 with the aim of developing, owning, and operating renewable energy projects across Africa. Lekela has since become one of the largest renewable power generation platforms on the continent, with a portfolio of wind and solar projects in Egypt, South Africa, Senegal, and Ghana.
The second sale of Lekela Power was completed to a consortium led by the global infrastructure investment manager, Brookfield Asset Management. The consortium also included the global private markets investment manager, Global Infrastructure Partners (GIP). The transaction valued Lekela at approximately $1.9 billion, making it one of the largest renewable energy deals in Africa to date.
This sale comes just months after Actis completed its first sale of an African renewable power platform in 2021. In February, Actis sold its stake in the Azura-Edo Independent Power Project in Nigeria to a consortium led by the African Infrastructure Investment Managers (AIIM). The project is a 459 MW gas-fired power plant that provides electricity to over 1 million Nigerian households.
The successful completion of these sales demonstrates Actis’ ability to identify and develop high-quality renewable energy assets in Africa and create value for its investors. It also reflects the increasing attractiveness of the African renewable energy sector to global investors.
Africa has abundant renewable energy resources, including solar, wind, hydro, and geothermal. However, the continent has historically faced challenges in harnessing these resources due to limited investment, inadequate infrastructure, and regulatory barriers. In recent years, however, there has been a significant shift towards renewable energy in Africa, driven by factors such as the need for clean and affordable power, the declining costs of renewable technologies, and the growing recognition of the potential economic benefits of renewable energy development.
Governments across Africa have been implementing policies and regulatory frameworks to attract investment in the renewable energy sector. This has created a favorable investment climate and has encouraged both local and international investors to explore opportunities in the market. As a result, the renewable energy sector in Africa has been experiencing rapid growth, with new projects being developed and commissioned across the continent.
Actis’ successful sale of Lekela Power is a testament to the increasing maturity and attractiveness of the African renewable energy market. It also highlights the potential for significant returns on investment in this sector. The sale will provide Actis with capital to reinvest in new opportunities, further driving the growth of renewable energy in Africa.
The completion of these sales also underscores the importance of private equity firms like Actis in driving sustainable development in emerging markets. By investing in renewable energy projects, Actis is not only generating financial returns for its investors but also contributing to the transition towards a low-carbon economy and supporting the achievement of the United Nations Sustainable Development Goals.
In conclusion, Actis’ completion of its second sale of an African renewable power platform in 2021 is a significant milestone for both the firm and the African renewable energy sector. It demonstrates the growing interest and investment in renewable energy in Africa, as well as Actis’ ability to identify and develop attractive investment opportunities in the region. With the continent’s abundant renewable energy resources and favorable investment climate, Africa is poised to become a major player in the global renewable energy market, and Actis is at the forefront of this exciting development.
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