Only 27% of Mali’s population has access to electricity. Mali has limited installed power generation capacity which is largely derived from hydro and thermal power plants and supplemented by energy imports from neighbouring countries. Demand for energy in Mali has risen by 10% per annum in the past five years, outstripping supply, and the country’s population is projected to double by 2035. The Government of Mali’s Politique Énergétique Nationale highlights the need for investment in renewable energy infrastructure, identifying the development of Mali’s solar power potential as part of its efforts to close the country’s energy access gap.
The Government of Mali signed a concession agreement with international renewables developer Akuo Energy, giving the company rights to build, own, operate and transfer a 50.2MW solar plant in Kita, 150km west of the capital, Bamako. Power will be sold to the government utility, Electricité du Mali SA, under a 28 year power purchase agreement. This will be Mali’s first utility-scale solar initiative and the local banks in Mali did not have the risk appetite to provide payment guarantees on behalf of the scheme to improve its financial viability. GuarantCo provided an innovative guarantee facility totalling $2.8m to help mobilise debt financing and to support Akuo Energy in achieving financial close. GuarantCo worked with its fellow PIDG companies on this; EAIF was the project’s mandated lead arranger, providing $21m of senior debt, and GAP supplied a $10m mezzanine facility. EAIF has subsequently taken on GAP’s commitment to the scheme and will fund the mezzanine component.
Akuo Kita Solar will deliver much-needed energy to Mali’s national grid, increasing the country’s installed generation capacity by up to 12%. The plant will create 400 construction jobs, with 30 long-term positions available for local people. By providing access to clean power, it is anticipated that the scheme will stimulate Mali’s economic growth.
The Akuo Kita Solar Project demonstrates the importance of credit enhancement in improving the viability of infrastructure programmes, setting a precedent for similar renewable energy schemes in Mali. The ability of PIDG companies to creatively combine a range of financial instruments to provide an overall solution was a key factor in the development of the venture.
Akuo Kita Solar will be one of the largest solar plants in west Africa and marks Akuo Energy’s first African project to reach construction, bringing vital expertise and finance to the region and demonstrating the value of solar power in Mali’s energy mix.
A digital representation of the Kigali Bulk Water plant in Rwanda
With Nigeria’s population expected to exceed 400 million by 2050, the country needs to invest billions in power, transport and housing infrastructure. However, access to finance has been constrained by the limited capacity of local banks to provide long-term capital, and by the perception among Nigeria’s substantial pension and insurance funds that infrastructure bonds are high risk. To address this, TAF, GuarantCo and the Nigerian Sovereign Investment Authority established InfraCredit, which guarantees to de-risk infrastructure bonds. InfraCredit issued its first guarantee in 2017, supporting an investment bond issued by power developer Viathan to expand its natural gas generation portfolio. As the first issue of its kind by the private sector to attract investment from domestic pension and insurance funds, the bond sets an important precedent in Nigeria’s capital markets. Attracting new sources of local currency finance enables Viathan to reduce its exposure to currency risk, while delivering vital power infrastructure.
A power project supported by InfraCredit's guarantee