West Africa-focused renewable energy company, Africa REN, has secured €32 million in financing for its Walo Storage project in Senegal. Billed as a major breakthrough in West Africa, the project is the first battery storage project in the region dedicated to frequency regulation.
Senegal is currently challenged by grid capacity constraints due to limited spinning reserves, and the ongoing integration of intermittent energy. The Walo Storage project is expected to bring much-needed stability to the local grid and reduce power outages.
Financing for the project was arranged by Dutch development bank FMO, and the Emerging Africa Infrastructure Fund (EAIF), acting through Ninety One.
Of the €32 million, FMO provided a €11m loan. The bank provided an additional €8m loan through the Access to Energy Fund, one of the funds FMO manages on behalf of the Dutch government with the aim to create sustainable access to energy in developing countries.
“With the financing of the Walo Storage project, FMO contributes to a more stable and sustainable energy supply in Senegal,” said Huib-Jan de Ruijter, Co-Chief Investment Officer at FMO.
“The transaction is an important milestone for FMO in adding storage to FMO’s energy strategy, which goes beyond energy generation and addresses bottlenecks in the energy transition. With the Walo Storage project FMO also further strengthens its strategic relationship with Africa REN and its commitment to support Senegal’s energy sector,” adds Ruijter.
An additional €11m loan was provided by EAIF, a Private Infrastructure Development Group (PIDG) company, plus a $1.5m (equivalent in EUR) of a Viability Gap Funding (VGF) extended by PIDG Technical Assistance.
Commenting on the transaction, Tidiane Doucoure, Director at Ninety One, the Fund Manager of The Emerging Africa Infrastructure Fund, said: “We are delighted to back Africa REN and support the first project-financed solar + battery storage project in Senegal, using our experience and expertise in the country. Upon completion, the project will provide grid stabilization and ancillary services to the utility company, Senelec”.
According to Africa REN, the investment aligns with its commitment to contribute positively to the communities in which it operates. The Walo Storage project comprises an inclusion program that involves training for young people and the construction of small solar plants for local pumping stations.
“This landmark funding from FMO and EAIF for the Walo Storage project reaffirms our commitment to the region. It also paves the way for an innovative and resilient energy infrastructure that supports Senegal’s 2030 Universal Access objective and significantly reduces CO2 emissions,” said Gilles Parmentier, CEO of Africa REN.