London, 29 January 2018
GAP supports 50MW renewable power in one of the world’s poorest countries with 20 year €8m mezzanine loan.
GAP has joined with two other PIDG companies, EAIF and GuarantCo, to provide innovative finance to support the first private sector solar farm in Mali.
The 50MW Akuo Kita solar farm is to be built in southern Mali and will be the largest of its kind in west Africa.
Power generated at the site will provide a much-needed boost to the national grid. This will help to reduce reliance on the burning wood and charcoal for power, which provides 78% of energy supplies.
GAP Executive Director Peter Hutchinson said: ‘The success of the Akuo Kita financing demonstrates the need for a blend of different financial instruments. This could serve as a good template for future solar schemes.’ GAP received investment support for the transaction from EISER Infrastructure Partners.
Mali is classed as a fragile state and is one of the world’s 25 poorest countries. Some 36% of Malians live below the poverty line and 30% of the working age population is unemployed. It is estimated that some 400,000 people could benefit from the facility once it is fully operational.
Up to 400 people, including 20 managers, will be employed during the 14-month construction period. Once operational, the plant will have 30 permanent staff, all of whom are expected to be from Mali.
Working with private sector developer Akuo Energy, GAP is providing a mezzanine loan of €8m over 20 years.
PIDG company EAIF acted as the mandated lead arranger for the €54m of financing for the project, lending €18m over 15 years. Additionally EAIF will take over responsibility for the GAP mezzanine facility. GuarantCo provided a Debt Service Reserve Account guarantee, which provides financial assistance in the event a project is unable to make its loan repayments due to currency volatility.