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February 24, 2020

Africa Finance Corporation invests $63m in first Djibouti wind project

Pan-African financial institution Africa Finance Corporation (AFC) is investing $63m to construct and operate Djibouti’s first wind power project.

By Ilaria Grasso Macola

Pan-African financial institution Africa Finance Corporation (AFC) is investing $63m to construct and operate Djibouti’s first wind power project.

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AFC –  with investment firms Great Horn Investment Holding (GHIH), Climate Fund Managers and the Dutch Development Bank (FMO) – will construct and operate a 60 MW wind project near Lake Assal, north-western of the capital Djibouti.

AFC president and CEO Samaila Zubairu said: “We are delighted to have the opportunity to invest and develop such a significant renewable power project in Djibouti. We see renewable and green projects as a key part of our investment strategy as we look to support a sustainable future in Africa.”

The project is expected to start functioning in 2021 due to the adoption of an all-sponsor equity financing plan which enabled the start of construction within two years, as opposed to the typical three- to five-year development cycle.

AFC COO Oliver Andrews said: “This is a significant project for Djibouti as its first renewable energy project and signifies the country’s efforts to establish its own energy production from its own resources.”

The wind project is an important step in the country’s energy development. According to the UN Environment Programme, Djibouti’s energy sector has not seen much progress for several decades and has an electrification rate of just 50%. The country relies on thermal power production as well as imports from Ethiopia but aims to transition to 100% renewable electricity by 2030.

With less than 100MW available for the population, the power sector is facing challenges,  especially as electricity demand is expected to increase.

FMO private equity director Jaap Reinking said: “The investment in Djibouti Wind is a perfect fit with FMO’s strategy because of its contribution to the company’s impact and CO2-reduction goals. This project will significantly reduce GHG emissions in the HFO dominated (90%) electricity sector of Djibouti.”

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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
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