The Multilateral Investment Guarantee Agency (MIGA), part of the World Bank Group, has issued 15-year guarantees for USD18.9 million to Africa-focused renewables platform, BTE Renewables, in order for it to cover its equity investment in the 75-MW solar power plant near Prieska, in the Northern Cape province of South Africa.
According to MIGA, the guarantee shields BTE Renewables from the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract related to the asset.
MIGA’s guarantee to BTE Renewables covers 85% of its equity investments in the 75-MW solar power plant, and enables the company to gain access to capital and investment resources while protecting against potential risks.
The solar plant was awarded in Round 3 of South Africa’s REIPPP, and was acquired from global independent power producer Sonnedix Power Holdings Ltd.
BTE Renewables develops utility-scale wind and solar projects across Africa, and is owned by UK growth markets investor Actis. Recently, Actis agreed to sell the platform to French utility Engie SA and Paris-based asset manager Meridiam. The company has six operating projects totalling c500MW in generating capacity, five projects in South Africa and one in Kenya.
MIGA guarantees de-risking African RE projects
Through its guarantee support, the World Bank, says it takes non-commercial risks which can’t be priced or absorbed by the commercial market players, either due to lack of track record, creditworthiness, or fragility.
Guarantees mitigate risks, boost investor confidence, and ensure that development projects can proceed even in contexts where private capital is scarce or costly.
MIGA has been issuing guarantees for renewable energy projects across the continent. The World Bank member last year issued a similar guarantee of $24 million for the Golomoti solar photovoltaic plant in Malawi.