How Actis Built a $1Billion African Renewable Energy Platform

With high energy potential, Africa faces imperative challenges in providing sustainable energy to its citizens. Over 640 million Africans do not have access to power, with constant electricity blackouts costing the continent as much as 4% of GDP. In sub-Saharan Africa (excluding South Africa) the electricity access rate is over 40 per cent, with the lowest emissions per capita of any region according to the IEA. All leading to negative climate and economic effects. Sub-Saharan Africa has had the world's largest electricity access deficit for a decade, rising to 568 million people in 2020.

The Market

The per capita consumption kWh of energy in sub-Saharan Africa (excluding South Africa) is among the lowest in the world compared to 13,000 kWh per capita in the United States and 4,500 kWh in the united kingdom. This presents huge potential for investors to tap into.

The Opportunity

Africa’s geographical fabric and high solar irradiance hold huge potential but are currently underutilised. The opportunity to provide sustainable energy through wind power and solar energy supported by energy technologies will drive economic growth, increase job creation, and improve education and health services while achieving development goals. The demand for energy generation is expected to grow to 7-8 % over the coming years. According to the Africa Development Bank, Africa needs US$288bn to reach the goal of universal access to electricity by 2030, requiring public and private, local and international partnerships to achieve this.

From an investment perspective extending the national grids is the least costly approach to achieve an acceptable return on investment. In rural areas, where high electricity deprivation is rife, mini-grids and stand‐alone systems, mostly solar-based, are the most viable solutions.  Solar energy-driven renewables solutions including wind, hydropower and geothermal will pave the way for sufficient electricity supply as a catalyst for economic growth, with Solar PV quite popular and the cheapest source.

The Playbook

Actis has successfully built a strong reputation across the continent based on value-driven investing that adheres to the highest ethical standard while ensuring positive economic impact. Some of its well-known landmark investments are the Accra Mall in Ghana, Nigeria’s first LEED-certified commercial building Heritage Place and Cameroon’s first certified green building. Other infrastructure-focused investments include the Africa Data Center Platform and other renewable energy projects.

Its approach to building the BTE Renewable Energy platform was to buy, build and distribute renewable energy assets to the point of commercial operation while ensuring connectivity to the respective country’s national grid.

The building of the BTE Renewable platform started in 2017 when Actis and its Kenyan partner Craftskills Wind Energy International acquired respectively (USD 88 million) 88 per cent and 12 per cent stakes in the Kipeto project which was still in development from the IFC, a member of the World Bank Group and African Infrastructure Investment Managers’ (“AIIM”), a member of Old Mutual Alternative Investments.

They also received a $233 million senior debt from the US government via the Overseas Private Investment Corporation (OPIC). In 2019, Actis acquired South Africa-based Bio-Therm Energy to build a platform focused on scalable wind and solar projects and rebranded the new entity to BTE Renewables (BTE).

Through BTE Renewables a series of power generation projects were developed with the 100MW Kipeto Wind Energy Project becoming Kenya’s second-largest wind project which consists of 60 GE turbines, generating an annual 380 GWh of energy and supplying an estimated 250,000 households. While maintaining the highest international standards in health, safety and environmental protection other projects were commissioned to commercial end such as:

• South Africa’s solar PV project, MBP Solar Energy Facility with a generating capacity of 86 MW.
• An onshore wind project called the Golden Valley energy facility in South Africa with a generating capacity of 120 MW and 48 turbines.
• A 32.5MW and 13 turbines wind energy facility called The Excelsior in South Africa
• A solar PV project called The Konkoonsies II solar energy facility also in South Africa generates 86MW with 250,160 modules and The Aggeneys solar energy with 46MW generating capacity and 140,640 modules.

Actis recently agreed to sell 100% of BTE Renewables (BTE) to Engie and Meridiam, with Engie acquiring all the South African portfolio and team while Meridiam will acquire the Kenyan portfolio and team. This emphasises the role Actis plays in being developers of scalable and commercial-focused energy platforms while ensuring environmentally friendly impact.