African firms partner to establish Pan-African Renewable Energy Fund

The fund will support the development of solar and storage projects across Africa. Image: Scatec

Investor Harith General Partners and African power provider Anergi Group have partnered to establish the Pan-African Renewable Energy Fund (PAREF) to accelerate renewable energy deployment across Africa and close the continent’s investment gap.

The US$300 million fund aims to bridge the energy access gap across Africa, while contributing to the just transition through targeting renewable and storage projects as a means to decarbonise power systems on the continent.  

The International Energy Agency (IEA) estimates that closing the energy access gap in sub-Saharan African countries will require an estimated annual investment of US$28 billion from now until 2030, including US$13 billion for mini-grids, US$7.5 billion for grid investments and US$6.5 billion for off-grid investments. 

Similarly, research firm Wood Mackenzie has predicted that electrifying economies in the region will require upwards of US$350 billion of investment, with current levels of investment no where near what is needed.

PAREF will build on Anergi’s operations in the region by developing, financing and executing some of the largest independent power projects in Africa, it said via a media release.

A Harith-backed energy investment vehicle, Anergi’s portfolio comprises five operating assets and a total installed renewable and thermal capacity of 1,413MW, supplying up to 23 million customers across Ghana, Kenya, Nigeria and South Africa. 

Anergi will provide project development expertise and resources, with Harith supplying investment capital. Harith will also monitor development-phase milestones and widen the projects’ access to funding to optimise finance terms. 

“PAREF is an important and urgent response to climate change – by accelerating Africa’s race to net zero, transitioning to a low carbon future and connecting millions of Africans to sustainable, green energy,” said Harith CEO Sipho Makhubela.

“Of the 770 million people without access to electricity, 75% live in sub-Saharan Africa. Coal, oil and biomass continue to play a significant part in Africa’s energy supply chain and the continent remains extremely vulnerable to climate change. PAREF will aim to take Africa’s energy supply into the 21st century to enable the transition to a low-carbon future.”

PV Tech Premium has explored how neo-colonialism in the energy sector has hamstrung Africa’s decarbonisation efforts by neglecting investment in key infrastructure and exporting profits and, in many cases, power abroad.  

Despite this, a recent IEA report showed that solar PV will lead new capacity additions in Africa, reaching a total installed capacity of 125GW by 2030, accounting for over 40% of total power capacity additions, by drawing on the continent’s strong solar resources.  

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