The British International Investment (BII) announced on 23 June that it would commit up to US$ 200 million to construct at least three hydroelectric projects in Africa as part of the partnership. The two entities will hold a 49 per cent stake in a joint venture with Norwegian renewable energy company, Scatec, with Norfund committing up to US$ 100 million over the few several years. “Hydropower is critical for providing clean baseload and peaking power, especially in the landlocked countries in Africa, as the continent transitions away from fossil fuels towards a net-zero future,” said Chris Chijiutomi, the BII’s head of infrastructure equity for Africa and Pakistan.
The alliance will focus on various existing and new projects, including the planned 205 MW Ruzizi III hydro project on the border between DRC and Rwanda. This is Africa’s first tri-national, public-private partnership and will supply electricity to Rwanda, Burundi and the DRC. Other hydro projects in Scatec’s African portfolio include the 350 MW Mpatamanga project in Malawi and the 120 MW Volobé hydropower station on the river Ivondro in Madagascar. The various pipeline projects will be designed and constructed over the next few years. BII estimates that in a decade, the clean electricity provided by the JV’s new assets could support the creation of at least 180 000 further jobs, avoid at least 270 000 tCO2e of GHG emissions annually, and meet the equivalent demand of more than 3 million people. BII’s commitment to hydropower comes as it enters a new five-year strategy, in which at least 30 per cent of its planned annual investment of between UK£1.5 billion and UK£2 billion will be devoted to climate finance.
The joint investment extends and compliments BII’s and Norfund’s existing commitments and partnerships to powering Africa, through Globeleq, an independent power producer in which BII and Norfund are shareholders, and their joint investment in H1 Capital, a South African renewables investment and development company. Norfund was instrumental in building SN Power into a hydropower developer in developing countries, which was then sold to Scatec in January 2021. The parties agreed to collaborate on SN Power’s projects in Africa, under Scatec’s ownership, with Norfund retaining a 49 per cent stake, which will now be shared with BII.
Currently around 600 million people in Africa, equivalent to slightly more than 40 per cent of the population, lack access to electricity. An International Energy Agency (IEA) study published in June predicted that Africa will need US$ 25 billion of investment per year to achieve universal energy access by 2030. Renewables, including solar, wind, hydropower and geothermal power, will account for 80 per cent of new power generation capacity by 2030, according to the IEA’s proposed Sustainable Africa Scenario. By 2030, hydropower is set to be the second-largest source of flexible power under the proposed Sustainable Africa Scenario. Fossil fuel powerplants in 2020 accounted for 80 per cent of Africa’s flexible sources for power systems, according to the IEA.