PowerCabeolica Wind Farm
Cabeolica Wind Farm
Background and transaction highlights
- Cape Verde is an archipelago country with outstanding wind resources and heavy reliance on expensive imported fossil fuel for energy generation
- Cabeolica Wind Farm was the first commercial scale, privately financed PPP wind farm in Sub Saharan Africa
- The Project comprised the development, construction, ownership and operation of 30 wind turbines on 4 islands for an approximate 26 MW of installed capacity for Cape Verde
- AFC worked alongside InfraCo, Finnfund, the Government of Cape Verde and the national electricity company, Electra, to deliver the project (as the founding shareholders)
- €45m in long term debt capital commitments was secured from African Development Bank and European Investment Bank
- The project has been fully operational since 2012
Economic Development / Public Policy impact
- Project provides c.15% of Cape Verde's energy requirements
- In 2019 the production of wind energy by Cabeólica was responsible for the avoidance of 53,692 tons of CO2 equivalent, bringing the total of the project’s avoided emissions to 422,026 tons of CO2e
- The Company has further contributed to indirect employment through its many retainer contracts with local companies for services such as legal counsel, wind farm site security, IT, insurance and cleaning – roughly 40 indirect job posts have been created and maintained, with a rough calculated estimation that 5 are held by women
- 6.8 million Cape Verde Escudos invested in environmental preservation
- 4811 students participated in the renewable energy efficiency education project (the EOLO project) aimed at teaching 9-10 year olds about clean energy sources following the Cabo Verde Ministry of Education and Sports curriculum
- 15 million litres of fuel which the country avoids importing annually as a result of the Project
- 96 lectures on biodiversity preservation and renewable energy, covering all secondary schools in Boa Vista, one of the 4 Islands on which Cabeolica wind turbines are situated
PowerDjibouti Wind Farm
Djibouti Wind Farm
Delivering Djibouti’s first private sector financed renewable energy project.
- AFC has been working with Djibouti Ports and Free Trade Zone Authority in a joint partnership to develop a 60MW wind IPP located between Lake Assal and Djibouti city
- The Project is Djibouti's first privately financed independent power plant
- With a total project cost of US$122 million, AFC alongside FMO, GHIH (local partner) and CIO, co-developed the Project over a 24-month period and achieved Financial Close in December 2019
- With current installed capacity of c.80 MW and only 15MW operational due to ageing diesel plants, leading to an over reliance on Ethiopia for 70MW of power
- Electricity consumption has increased by 75% in the last decade, while power generation has only increased at a rate of c.6% p.a. mainly from imports from Ethiopia. The Project provides a significant energy source that could fuel increasing energy demand in the country
- The country is currently dependent on fuel oil / diesel thermal power which comes at a high cost of up to US$0.22/kWh and electricity imports from neighboring Ethiopia at US$0.07/kWh, which can often be unreliable especially during the dry season. The Project provides a self-reliant option for the county at a very competitive price of US$0.07 – 0.08/kWh
Transport & Logistics / Heavy IndustryARISE IIP
- In 2016, AFC invested US$140 million for a 21.0% stake in Gabon Special Economic Zone (GSEZ), owning into three principal assets, a special economic zone and two ports under construction at the time, Owendo Mineral Port and New Owendo International Port- alongside Olam International (40.5%) and Caisse des Dépôts et Consignations du Gabon (CDC Gabon), the Republic of Gabon’s (RoG) investment vehicle (38.5%)
- In 2020, the business was rebranded and re-organised into 3 separate verticals – each a unique joint-venture partnership, with strategic partners and host government shareholders: ARISE Port & Logistics (‘ARISE P&L’), ARISE Integrated Industrial Platforms (‘ARISE IIP’) and ARISE infrastructure Services (‘ARISE IS’)
- Since AFC’s investment, several global investors have invested in the platform through debt/equity including AfreximBank, African Development Bank, GuarantCo, Investec, Bollore, Meridiam, Stoa, AP Moller Capital and most recently, the Fund for Export Development in Africa (FEDA).
About the business
ARISE IIP is a joint venture between AFC Equity (75.9%) and The Africa Transformation and Industrialization Fund (24.1%) with three operational zones - Nkok SEZ in Gabon, Glo-Djigbe Industrial Zone (GDIZ) in Benin and Plateforme Industrielle d’Adétikopé (PIA) in Lome. Other countries in which concessions have been secured and / or are under construction are: Cote D’Ivoire, Chad, Nigeria, Republic of Congo, Democratic Republic of Congo, Sierra Leone and Rwanda.
Integrated Industrial Zone Business Model
Nkok SEZ, Gabon is a 1093 multi-user industrial park launched in 2011 providing: End to end timber sourcing; Timber handling, warehousing, and other logistics; Shared infrastructure; Management of a 37ha furniture manufacturing cluster; and Freight handling through New Owendo General Cargo Port.
ARISE IIP has developed Plateforme Industrielle d’Adétikopé (PIA), an integrated industrial and logistics park spanning over 400 Ha (of which 130 Ha in Phase 1), located in the vicinity of Lomé, and with a primary focus on the agricultural and logistics value chains in Togo (incl. cotton, cashew, and soyabean). PIA was developed as a joint venture with the Togolese Republic (35% stake).
The Glo-Djigbe Industrial Zone (GDIZ), is an industrial park covering an area of 1,640 Ha (of which 400 Ha in Phase 1), located 27 km from Cotonou, and focusing on agro-processing activities (incl. cashew and cotton). The project is developed as a joint venture with the Republic of Benin (35% stake).
- In 2020, AFC invested US$150 million convertible debt in ARISE IIP for expansion into Benin, Togo and Chad - following execution of binding concession agreements with the respective governments.
- Over 2022/2023, AFC invested another US$135MM in a combination of shareholder loans and convertible debt across tranches, in ARISE IIP – to enable advancement of ongoing projects (Benin and Togo) and commencement of construction of new zones in five countries – Nigeria, Cote d’ Ivoire, DRC, Republic of Congo and Rwanda following execution of binding concession agreements with the respective governments.
Economic Development / Public Policy Impact
- Over 140 industrial, commercial, and residential investors, with investments totaling over US$2.0bn to date
- Created 17,500 FTE jobs (x3 since 2010)
- US$798.7 million revenue from wood transformation since 2018
- US$33.9 million fiscal impact as of 2021
- Zone has led to timber beneficiation – facilitating processed wood and finished furniture products
- Gabon now has zero export of raw timber
- Gabon is the 3rd largest largest veneer exporter globally
- Gabon is the 2nd highest exporter of sawn wood in Africa, 10th globally
- Gabon has become a leading player in furniture manufacturing and export.
- Value of wood increased from US$150/cbm for log to US$4,000/cbm for furniture
- US$1bn of wood product exports in 2019 compared to US$350MM in 2010
- Contributor of US$842MM to Gabon’s US$14bn GDP (c.6%)
- Climate / Sustainability Impact of GSEZ
- Critical environmental impact, via import substitution and fight against deforestation, with energy-efficient operations.
- GSEZ is the first African industrial zone to be carbon neutral, thus contributing to its ESG performance. This has been internationally acknowledged, notably with the receipt of Impact Awards from Environmental Finance in 2022 and most recently, the 2023 Reuters Sustainability Pioneer Award.
- Generated US$11.5 million of economic value with 12 currently active firms in the zone;
- Attracted US$77 million of FDIs since start of operations generating US$155 million of revenues to date;
- Delivers 1.9x value creation in the economy for all every USD spent by tenants;
- 3,200 direct and indirect jobs created;
- Beyond the core agricultural sectors (cotton, soybeans, and cashew), PIA is a critical enabler of Togo's economic diversification, with other industries such as pharmaceuticals manufacturing, biodiesel production, metals processing set to grow at 18.0% per annum;
- Overall, Togo SEZ is expected to generate US$0.75bn in additional GDP, US$1bn in additional exports and positively impact over 200 farmers;
- Generated over US$432 million of economic value with 38 currently active firms in the zone;
- Attracted US$1.0 billion of FDIs since start of operations in 2022 generating US$1.9 billion of revenues for the economy;
- 11,100 direct and indirect jobs created;
- Benin SEZ is expected to generate US$2bn in additional GDP, US$3bn in exports and impact 600k farmers
In summary, ARISE IIP has enabled effective diversification of the Gabonese economy from dependence on crude oil exports, created jobs, increased FX earnings and GDP, and is expected to do the same for Benin, Togo and all the countries in its construction pipeline.
Natural ResourcesSegilola Gold Mine
Segilola Gold Mine
The benchmark for the future of commercial gold mining in Nigeria.
- The Segilola Gold Mine in Osun State, South-west Nigeria, approximately 120km Northeast of Lagos is the first large scale gold mine in Nigeria
- The mine is expected to produce up to 100,000 oz of gold per annum
- The project is led by Thor Explorations Limited
- Thor Explorations Limited is a mineral exploration company listed on the Toronto Stock Exchange and the AIM Market of the London Stock Exchange, with a focus on gold exploration & production in West Africa
- The mine is currently in commercial production, and is expected to produce 80,000 – 100,000 oz of gold in 2022
- AFC made an investment commitment of US$86 million towards the construction and production of the Segilola Gold Mine through a combination of senior secured debt, equity and a stream
- The investment has opened the Nigerian Mining Sector (a top priority for Nigerian Federal Government) to Foreign Direct Investment, thereby re-igniting the relevance of the Nigerian mining sector and encouraging diversification of the economy
Heavy IndustryDangote Refinery
Background and Transaction Highlights
- Dangote Industries Limited (DIL) is the holding company of Dangote Group with equity interests in the various Dangote Group subsidiaries including Dangote Cement, Dangote Sugar and Dangote Salt
- AFC is a senior debt participant for US$300 million of a total of US$5.6bn in debt facilities comprised of DFI, commercial bank and Export Credit Agency tranches
- The purpose is to part-finance the construction of two greenfield projects namely a 2.8 mtpa urea fertiliser plant and 650,000 barrels per day crude oil refinery, the largest in Africa once completed
Economic Development / Public Policy Impact
- The crude oil refinery is expected to curb Nigeria's increasing crude oil imports which meet 80% of the country's demand (the balance of 20% is met by local refining capacity)
- The refinery has the capacity to double Nigeria’s current refining capacity, thereby meeting 100% of Nigeria’s refined products required.
- The refinery is expected to contribute to federal government budget savings that would otherwise have been used for fuel subsidies
- Both the refinery and the fertiliser plant upon completion will attract over 100,000 direct and indirect jobs
- The fertiliser plant capacity is expected to meet all local fertiliser demand thereby eliminating the importation of fertilisers completely
TelecommunicationsMTN Nigeria (MTNN)
MTN Nigeria (MTNN)
- MTNN has experienced increased demand for data services, accelerating its already planned network expansion to accommodate more data traffic. The Facility will enable MTNN finance equipment required for its 3G/4G networks, ensure its network capacity is able to meet the increasing demand and capture future potential growth. This demand is driven by increased usage of smartphones and broadband services due to Covid-19 containment policies that have seen customers working remotely and via unprecedented levels of video conferencing and streaming services
- Following the aggressive 4G network deployment from MTN, Airtel and Globacom, the outlook for the Nigerian Telecoms market is expected to remain positive. The market continues to record growth, suggesting new organic subscriber potential in line with demographics. Future subscriber growth opportunities are in underserved rural areas where there is little or no network coverage, and it is believed that the operators that pursue a rural roll-out strategy will outperform in terms of future subscriber growth
- AFC is pleased to support MTNN in upgrading its network to capture these new opportunities
- AFC acted as Mandated Lead Arranger and provided funding of up to US$80 million as part of a 3-year US$100 million term loan facility coordinated by Rand Merchant Bank (RMB) to fund MTN Nigeria Communications’ capital expenditure for critical equipment in Nigeria and other uses
Economic and Development Impact
- MTNN's role in the growth of Nigeria's telecoms industry is transforming the way people live, work and interact owing to broadband connectivity; creating new companies and jobs to integrate various new services and applications which build upon the network.
- With the largest 3G and 4G network coverage, MTNN is also able to empower marginalised communities
Natural ResourcesAlufer Mining
- Alufer Mining holds four bauxite exploration licenses over a combined area of 2,977 km – with principal bauxite assets including the Bel Air Project located in Boffa region of western Guinea & the Labé Project in central Guinea
- Alufer has declared over 3 billion tonnes of mineral resource in terms of the JORC Code at the Bel Air Project and Labé Project
- Production capacity of 5.5 million tonnes per year, significantly adding to the country’s existing exports of c.35 million tonnes of bauxite
- AFC invested US$35MM in the project along with partners Orion Mining Finance and Resource Capital Funds
- The total project funding of US$205 million is one of the largest foreign investments in the country since the 2014 Ebola crisis
- AFC is the sole private investor in Guinea’s largest foreign investment in since 2014
Economic / Public Policy Impact
- With up to 30% of all exports accounted for by bauxite exports, the impact to the population of this investment is tremendous
- The project is expected to create over 3,500 jobs
- A 1.4km long causeway for trans-shipment was constructed on bedrock which provides access from the shore to appropriate water depth
- 83% of the workforce are Guinean Nationals, with over 50% of workers being from local communities and 80 women employed in mine construction
- CSR Projects include: food cropping project with a local cooperative, involving the development of chilli, eggplant and cassava nursery crop, construction of structures/facilities including school classrooms and a TV block; and health and safety awareness for local communities; 250 community members who received free HIV training and testing during an HIV awareness day organised by Alufer, in conjunction with the Guinea Chamber of Mines
- Robust biodiversity management programme including community-focused seed/cutting collection and cultivation rehabilitation programme, to support plant colonies needed by primate species in the surrounding forests (over 7000 seedlings planted)
- Alufer operates a local recruitment process aimed at maximising recruitment of candidates originating from villages in the project impact zone. As at December 2017, 1236 workers out of Bel Air's total workforce of 1485 were Guinean Nationals, with 50% of workers being from the local communities
Transport & LogisticsTakoradi Port
- In 2017, the Ghana Ports and Harbor Authority (GPHA) awarded a 25-year concession to IbisTek for the expansion of container and multipurpose terminal at the port of Takoradi
- The port expansion project includes design, engineering, financing and construction of an on-dock container and multipurpose terminal
- The location of the port provides shorter and less congested road links to goods to/from west and central Ghana, compared to Tema where evacuation must go through Accra, which is highly congested
- The project components include dredging works to a draft of 16m; land reclamation of 5 new berths and construction of a 1,700m quay wall, pavement, electrical installations and other ancillary services
Economic / Public Policy Impact
- The Project forms part of the larger port enhancement masterplan developed by the GPHA which in addition to the Project includes the development of a bulk terminal/jetty to handle bulk commodities and a dedicated oil and gas hub to cater for supply activities related to the oil industry
- Serves importation and exportation of goods to/from the west and central Ghana (e.g. Takoradi, Kumasi) and landlocked countries (e.g. Mali, Burkina Faso, Niger).
- A significant amount of traffic that would naturally have been destined for Takoradi port are currently routed through other ports (e.g. Tema, Lomé) causing substantial delays and increasing the overall logistic cost to the end client
- Improves logistics of exports of goods (largely cocoa and cocoa related products) from surrounding regions
- Supports the industrial zones currently under development within the region
Sovereign LendingGovernment of Tanzania
Government of Tanzania
Contributing to real GDP growth and industrialisation:
- Consistent with its 2025 vision, the Government of Tanzania aims to transform the economy from a low productivity agricultural economy to a semi-industrialised competitive and dynamic economy with high productivity
- AFC participated in a US$1 billion Syndicated Loan Term Facility by investing US$85 million Facility to the Government of Tanzania
- Facility assisted Government of Tanzania to meet its budgetary requirements towards infrastructure-related projects for the 2018/2019 fiscal year
- The implementation of the approved infrastructure projects will contribute to real GDP growth and industrialisation
- Overall alignment with Tanzania's vision to promote high quality livelihood, good governance, high quality livelihood, peace, stability and unity, good governance, a well-educated and learning society; and a competitive economy capable of producing sustainable growth and shared benefits