Finance | Accounting for finance IWP&DC traces how investment is taking shape across the hydropower industry
BRITISH INTERNATIONAL INVESTMENT (BII), the UK’s development finance institution and impact investor, is to provide up to US$25million to expand access to sustainable energy in Tanzania. The funding given to renewable energy platform
Above: Kate Gilmartin, CEO of the British Hydropower Association, says the UK government’s decision to support vital investment in long duration energy storage technologies, such as pumped storage, will unleash billions in private investment
Rift Valley Energy (RVE), which is owned and managed by Meridiam, will support part of RVE’s ambitious investment and development plan for future renewable energy projects, including new hydropower capacity across the country. Such support will contribute to increasing the national grid’s supply of sustainable and affordable electricity to businesses and communities in low-income rural areas. RVE, a Tanzania-based renewable energy infrastructure development company, is wholly owned by Meridiam, an independent investment Benefit Corporation and an asset manager that specialises in the development, financing, and long-term management of sustainable public infrastructure. Meridiam acquired RVE in 2023 with a view to grow its generation assets. The national electrification rate in Tanzania is 37% and as low as 24% in rural areas. This financing from BII is expected to support an additional 7.6MW of new renewable energy assets which will provide power to about 170,000 people per year and connect 4000 businesses and households to the grid for the first time. The provision of clean and affordable power to local industries including factories that process tea, veneer, timber as well water treatment plants is expected to create 1800 jobs.
Below: US finance is helping the development of hydropower in Madagascar
Meridiam’s Deputy CEO and Africa Head, Mathieu Peller, said: “Rift Valley Energy is an investment which is true to Meridiam’s mandate and purpose, and we are pleased to partner with BII to grow the renewable energy projects being developed by the company. This facility affirms our confidence in Tanzania as a market, where the government has clear and ambitious economic development plans which we look forward to supporting through sustainable investment.”
Developing finance The US International Development Finance
Corporation (DFC) has approved technical assistance funding to support the development of a 120MW hydropower project in Madagascar. Volobe, a run-of-river power plant, will boost the supply of stable and affordable power to millions of people in Tamatave and the capital city, Antananarivo, through a 270km transmission line which is under construction. The Volobe project will increase the country’s electricity generation capacity by approximately 20%, bringing clean energy, jobs, and productivity gains to Malagasy businesses and individuals across the country. The project is managed by the Compagnie Générale Hydroélectrique de Volobe (CGHV) which has Axian and Africa50 as shareholders.
Once operational, the hydropower plant is
expected to generate substantial cost savings for JIRAMA (the Malagasy state-owned utility company) and will significantly contribute to Madagascar’s climate agenda. The new technical assistance facility is a significant
milestone that underscores the strategic cooperation between DFC and pan-African infrastructure investor and asset manager Africa50, and their shared commitment to scale innovative and climate-resilient infrastructure across the continent. The project company will deploy the funding into expediting project development activities, accelerating the project’s path to financial close. DFC Deputy Vice President of the Office of Development Policy, Christopher Walker, said they were proud to support Africa50 in their efforts to advance the development of the hydro projects. “Investments in energy provide people and businesses with reliable and secure sources of electricity to drive development, promote economic growth, and advance job creation,” he said. Anas Charafi, Senior Investment Director of Africa50, added: “This technical assistance funding by DFC is testament to the strength and strategic importance of the Volobe project which we are jointly developing with Axian. It will help expedite the development of the project, which will support industrialisation and play a key role in decarbonising the energy sector. Africa50 mobilises local and global capital at scale and, working hand in hand with our strategic partners, we aim to fast track the execution of transformative infrastructure projects.” Volobe will be located on the Ivondro River,
approximately 30km from the eastern city of Toamasina, the second largest city in Madagascar. The project harnesses Madagascar’s extensive hydroelectric potential, estimated at approximately 7.8GW, with over 800 hydropower sites with high untapped potential having been identified across the country. Financial closure of the project is expected in 2025.
24 | January 2025 |
www.waterpowermagazine.com
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