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Empower New Energy

Country
Africa
Technology
Other
Business model
CPP

Investment Name:  Empower Invest

Contract Signature date: September 18 2019

Region:  SSA

Country: Ghana, Kenya, and others

Sector: Solar PV, Hydro

Total ElectriFI Financing: 3.2 mUSD in equity

Environmental and Social Category: B

(A) high risk, (B+) medium high risk, (B) medium risk or (C) low risk

Project overview:

Empower Invest is the first investment platform set up by Empower New Energy, targeted at taking majority equity stakes in renewable energy-based C&I and small IPP projects. Empower aims to unlock small IPP and mid-size C&I projects by entering into a partnership with local and international developers during late-stage development phase to increase bankability of the projects, and subsequently provide equity to fully cover project-level construction costs. After initial operating period, the projects will be refinanced with debt at portfolio level.

Empower will focus on small solar, run-of-river hydro and wind projects with long-term power sales agreements with an electricity utility company (IPP) or a commercial or industrial customer (C&I). Regional focus for the moment is on East- and West-Africa and Empower offers local presence in Nairobi and Accra.

Co-investors in the first round are Norfund and a number of Norwegian private investors, while a number of other larger investors is being lined up for a second larger capital raise already.

Funding objective and impact:

Funding will be used for Empower’s initial pipeline of projects in Kenya, Ghana, and few other countries.

Why ElectriFI wants to fund this project:

Empower financing unlocks C&I and small IPP projects currently lacking access to financing, by assisting the developers to increase bankability of the projects, and offer initial full equity investment.

Environmental and social rationale:

The transaction is rated category B.

Developments in the C&I space come with potential limited adverse risks associated with labour conditions, waste management and health and safety. Empower has developed and is implementing an ESMS commensurate to the scale and scope of the C&I sector related activities.

When investing in small hydro projects the E&S assessment mitigation monitoring will be externalised to consultants experienced in the field and country of operation and supervised though the shareholding structure.

IFC Performance Standards 1 to 3 are triggered for the C&I portfolio. IFC PS 5 to 8 might be triggered for small IPP development

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