Guinea: GET.invest Finance Catalyst client signs financing agreement for 82 MW project
24 September 2020 | CleanPower Generation, a Germany-based developer of renewable energy solutions in sub-Saharan Africa, has signed a financing agreement with Frontier Energy, a fund of the Frontier Investment Management Company. The signing ceremony on 22nd September for the three linked solar projects totalling 82 MW in Guinea comes ten months after the Guinean Minister of Energy signed the concession agreement in the presence of German Chancellor Angela Merkel and ten African heads of state at the G20 Compact with Africa Summit.
The signature of the financing agreement is a milestone in the project journey that started three years ago: Since 2017, CleanPower Generation has been developing the on-grid solar projects in the port city of Kamsar and in the administrative centre of the city of Boké. As one of the first large-scale PV projects in Guinea, CleanPower Generation will contribute significantly to Guinea’s aim to produce 30% of its energy from renewable sources by 2030.
GET.invest has been supporting CleanPower Generation since July 2019. The programme’s Finance Catalyst advisors focused on liaising with financiers and designing a financial model which meets their expectations. They were also actively involved in the negotiation process of the concession agreement. “The advisors and I have been working closely on this project. Their input, the professional financial model and their ‘finance speak’ during conference calls has helped a great deal. In addition, being a GET.invest-supported project built reputation with potential financiers”, said Marcus Miller of CleanPower Generation.
This project is an African-European success story in many ways: the initial financial model template on which CleanPower Generation developed this project was provided by the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE). The financing from Frontier Energy is rooted in a joint European undertaking, the Global Energy Efficiency and Renewable Energy Fund (GEEREF).
GEEREF, a fund-of-funds structure advised by the European Investment Bank Group, was initially capitalised by the European Union through the European Commission’s Directorate-General for International Cooperation and Development, Germany and Norway. On this basis, the second round of GEEREF, which contributes to the fund through which Frontier Energy finances the project in Guinea, was able to raise funds from a broad range of private actors. This is thus a good example of the European approach of blending and leveraging private investments based on initial public inputs.
GET.invest, a European technical assistance instrument supported by the European Union, Germany, Sweden, the Netherlands, and Austria, has helped the project developer navigate the road to bankability. The story of this solar project is also the story of the External Investment Plan and the European partnership with Africa, supporting the mission of entrepreneurs such as CleanPower Generation, to provide reliable clean energy, at the lowest price available in Guinea today, for the benefit of the Guinean government, its state-owned utility EDG, the people of Guinea and the ambitious emerging Guinean industries.
Lars Tejlgaard Jensen, partner and investment director at Frontier Energy, spoke on the occasion of the signing ceremony: “CleanPower Generation has developed an outstanding project and we are pleased to partner with the developer to deliver a project that will be of great value to the people of Boké and Kamsar.”
Marcus Miller, CEO of CleanPower Generation added: “We are now looking forward to finalising all outstanding legal documents and permits with the Guinean government to allow us to implement the project with our international and local partners.”