Reliable electricity is a fundamental driver of economic growth. South Africans are learning to live in the dark as newspapers print survival tips and ‘load shedder recipes’ for food that can be prepared without electricity. There is a similar story in other African countries where electricity demand is set to grow 7-8%. Routine blackouts cost the continent as much as 4% of GDP. The demand for energy generation is therefore acute.
With such high solar irradiance and strong wind capacity across the continent Actis saw an opportunity to build Lekela Power (Lekela), a $1.9bn pan-African renewable energy platform set to deliver 1,000 megawatts of renewable energy across Africa over the next five years. Actis partnered with Mainstream Renewable Power, the global wind and solar developer, which will own 40% of the platform.
Lekela is making real progress towards meeting its goal, with 860 megawatts of wind and solar projects under construction or due to commence construction next year across South Africa, Egypt and Ghana. Three wind projects in South Africa form the bedrock for the platform, located in the Northern Cape and have a combined generation capacity of 360MW. These projects already take Actis’ total renewable portfolio to over 1500MW. Lekela is the eighth such energy platform Actis has created. It cements our Fund 3 platform strategy of aggregating energy assets into scalable regional platforms, further consolidating our position as a leading developer, owner and operator of renewable energy generation assets.
A number of developers have ambition in Africa but do not have all the resources or expertise of the Actis team to negotiate PPAs or navigate outside South Africa: ie pan-African experience, valuable relationships, structuring expertise and financing and operations management. According to the African Development Bank, the total African power generation per capita is as little as a tenth of some other developing regions such as South America, US$288bn will be needed if Africa is to reach the goal of universal access to electricity by 2030. Lekela is one of the biggest international platforms focused on renewable energy in growth markets helping to meet this demand.