A firm with Kenyan links is set to receive a Sh2 billion equity funding from the International Finance Corporation (IFC) for investment in renewable energy projects across sub-Saharan Africa excluding South Africa.
Berkeley Energy, which has an office in Nairobi, will receive the funding to boost its $200 million (Sh20.6 billion) Africa Renewable Energy Fund (AREF), which invests in viable wind, hydro, geothermal, biomass and solar projects.
The firm is one of the companies involved in the 1,000 megawatts (MWs) Corbetti Geothermal Project in southern Ethiopia and has also invested in several hydropower projects in Uganda.
“The AREF transaction is anticipated to have project-level impacts in the form of improved services offered to customers and environmental impacts that make a contribution to green industries,” the IFC says in its disclosures.
IFC did not specify the stake it would hold in the Fund. Eddy Njoroge, a former managing director of power producer KenGen #ticker:KPLC, serves as a member of Berkeley Kenya’s investment committee.
Other Kenyans working with Berkeley include Rachel Mutahi, AREF’s finance manager, and Paul Kizito, a former finance manager at G4S Kenya Group but who is now the fund’s finance controller.
“The impending funding by the IFC will replace an investor who has decided to exit the Fund,” Luka Buljan, AREF investment director in Nairobi, told the Business Daily in an interview.
“The money shall be channelled towards the same type of projects we invest in. We have spotted some interesting renewable energy projects in Kenya but none that we are ready to invest in at the moment. However, it remains an option.”
Berkeley Energy, which also has offices in Singapore, Mauritius, London and New Delhi, invests in companies that have the potential to generate between 10 and 50 megawatts.
The firm’s 10-year-old fund normally invests between $10 million and $30 million in a single project with a targeted return of about 20 per cent.
AREF’s other investors include the African Development Bank, West African Development Bank and the CDC Group.
Berkeley’s signature investment is the Corbetti project in Ethiopia where it has partnered with Reykjavik Geothermal of Iceland to sell geothermal power to the State in a multibillion-shilling project.