The Facility for Energy Inclusion provides USD 30 million to Equator Energy to scale its C&I portfolio across Africa
The Facility for Energy Inclusion (“FEI”) managed by Cygnum Capital (formerly Lion’s Head Group) signed a USD 30 million multi-country facility to finance the assets of Equator Energy, a leading commercial and industrial (“C&I") solar operator in East Africa.
On June 16th 2023, the Facility for Energy Inclusion (“FEI”) signed finance documents to provide USD 30 million of long-term senior debt to Equator Energy Limited (“Equator Energy”). Structured by FEI as a long-term senior debt facility, this transaction provides Equator Energy with the financing and flexibility to scale its portfolio.
Equator Energy is a pioneer in the C&I sector, operating the largest commercial and industrial solar power portfolio in East Africa. Since its inception in 2016, Equator Energy has shown strong and sustained growth, with its portfolio currently standing at 35MW of solar plants in operation and over 65MW signed and the ambition to reach 300MW by 2030. This transaction follows the announcement of the acquisition of a majority stake in Equator Energy by a consortium of IBL Energy Holdings Ltd (“IBL Energy”), a fully owned subsidiary of the IBL Group, and STOA, an impact fund created by Caisse des Dépôts et Consignations (“CDC”) and Agence Française de Développement (“AFD”).
“C&I renewables’ investments enable the uptake of cleaner and cheaper sources of electricity for businesses, driving economic growth. With a strong portfolio of operating assets and an impressive pipeline of customers, Equator Energy is the leading C&I solar developer in East Africa. FEI demonstrates its ongoing commitment to the sector and our clients with this transaction. We look forward to supporting Equator Energy’s growth trajectory as it continues to provide affordable clean energy to businesses in Africa through simple and integrated solar energy solutions”, said Carmen de Castro, Managing Director and Fund Lead at Cygnum Capital.
“We are excited to announce this long-term senior debt facility from FEI, which will drive the next phase of growth for Equator Energy. With their support, we will be able to expand our reach to new customers and markets, building on our over 100 existing customers. This investment by FEI, one of the largest single lender facilities in the C&I space, following on from the acquisition announcement by IBL Energy and STOA, demonstrates the strength of our team, our customers, and our markets “, said Sebastian Noethlichs, CEO and Founder of Equator Energy.
About Equator Energy
Equator Energy owns one of the largest C&I solar power portfolios in East Africa, primarily in Kenya and Uganda, with further operations in Zimbabwe, Somalia, South Sudan, and Gambia and customers across much of Sub-Saharan Africa. They provide fully integrated captive solar systems, either grid-tied or diesel hybrid. Their management and technical teams are headquartered in Nairobi, Kenya and they have maintenance teams across the countries within their portfolio. Their two founding investors include Maris, a diversified Africa focused investment company, and NVision, an Africa focused solar company.
About Cygnum Capital (formerly Lion’s Head Group)
Cygnum Capital Group is an investment bank and asset manager (formerly known as Lion’s Head Group), operating across frontier and emerging markets. Cygnum Capital Asset Management manages five pioneering funds: four debt funds including: (i) the African Local Currency Bond Fund (“ALCBF”), a ground-breaking investment vehicle established to support local currency capital markets, (ii) Off-Grid Energy Access Fund (“OGEF”) which supports companies in off grid energy such as SHS and small- medium mini-grids, (iii) FEI which support companies that provide a range of renewable energy solutions such as medium-large mini- grids, C&I and IPP with a maximum capacity of 25 MW, and (iv) AfricaGoGreen Fund (“AGG”) which supports companies combating climate change by reducing the use of fossil fuels through new technologies and that increase energy efficiency and promote economic development in high impact target sectors; and a VC private equity fund (v) E3 Low Carbon Economy Fund for Africa (“E3 LCEF”) which invests in climate-smart services, digital connectivity & applications, low-carbon productivity enablers. Cygnum Capital Asset Management has over USD 750 million of assets under management with investment in 27 African countries
About the Facility for Energy Inclusion
FEI is designed to support small-scale independent power producers delivering power to the grid, mini-grids, commercial and industrial and captive power projects. FEI was set up by the African Development Bank as part of its New Deal for Africa initiative. In addition to the investment by the AfDB, FEI received equity funding from the German Federal Ministry for Economic Cooperation and Development through KfW and Norfund and a loan commitment from the Austrian Development Bank. The AfDB also invested on behalf of the Clean Technology Fund and the European Commission.
The transaction was supported by FEI’s Project Preparation Facility (“PPF”), funded by the Global Environment Facility, through the African Development Bank. The PPF provides returnable grant funding for last-mile processes that are crucial to closing transactions and to fund due diligence and preparatory costs incurred in establishing innovative structures or transactions that FEI is seeking to lend to.
The Lender was advised by Dentons (legal), Afry (technical) and IBIS Environmental Social Consulting (E&S).
