World Bank's MIGA backs renewables in S Africa, Djibouti
Image by: Green Energy Markets (www.greenmarkets.com.au).
The Multilateral Investment Guarantee Agency (MIGA) recently announced it has insured investments in 288 MW of new renewables in South Africa and in Djibouti’s first utility-scale wind project.
MIGA, a member of the World Bank Group, has issued guarantees in support of two solar and two wind power projects developed by BioTherm in South Africa.
BioTherm is a South African-based independent power producer (IPP) wholly owned by investment firm Actis.
The solar projects covered by MIGA, Aggeneys and Konkoonsies II, are located in Northern Cape, while the Golden Valley and the Excelsior wind farms will be constructed in the provinces of Eastern Cape and Western Cape.
MIGA said its guarantees cover 90% of BioTherm’s equity investment for up to USD 46.9 million (EUR 43.4m) in the solar plants and USD 68.9 million in the wind farms. The projects are protected against the risks of currency inconvertibility and transfer restriction, expropriation, breach of contract and war and civil disturbance for up to 15 years.
The 288-MW quartet will operate under 20-year power purchase agreements (PPA) with South African public utility Eskom. Operations are expected to start later this year.
In Djibouti, MIGA has issued guarantees to support all stages of a 58.9-MW wind project, which will become the nation’s first IPP.
The guarantees were issued to Djibouti Wind Company Ltd to benefit Africa Finance Corporation (AFC), the project’s lead developer, and Construction Equity Fund, a blended finance facility managed by Climate Fund Managers, another investor in the wind farm.
MIGA’s guarantees total USD 91.6 million and cover up to 90% of investments made and future earnings in the project for up to 20 years. The guarantees provide protection against the same types of non-commercial risks as the South African projects.
The wind farm will be located in the Ghoubet area, while interconnection facilities will be spread between Lake Assal and Djibouti City. Once in operation, its output will be sold to state-owned power utility Electricite de Djibouti under a 25-year PPA.
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