Masdar JV Infinity Power acquires Africa’s Lekela Power in landmark renewable energy deal

Infinity Power, a joint venture between Egypt’s Infinity and UAE’s Masdar, has completed the acquisition of the entire shareholding of Lekela Power.

The transaction makes Infinity Power the largest renewable energy company on the African continent.

Infinity’s key stakeholders include Africa Finance Corporation (AFC) and European Bank for Reconstruction and Development (EBRD).

Lekela Power currently operates 1 gigawatt (GW) of wind power projects in South Africa, Egypt and Senegal, and has a 1.8GW project pipeline, which are in various stages of development.

The transaction was funded through equity investment from shareholders and debt from Absa Corporate and Investment Banking (Absa CIB) and Mauritian Commercial Bank (MCB)

Delivering on a commitment

Mohamed Ismail Mansour, chairman, Infinity Power said, “Having successfully finalised the Lekela acquisition, we will build upon this milestone to reach our target of installing and operating 2GW of greenfield projects by 2025. With this transaction, we have delivered on the promise made during COP27 of being the fastest-growing renewable energy company in Africa.

“We continue to drive efforts that reduce carbon emissions, increase renewable energy sources, and develop efficient energy solutions for the entire region, in order to achieve our vision of providing clean, reliable and affordable electricity access to people in underserved communities across Africa.”

Read: Egypt’s Infinity, Masdar PV plant fully operational, will power COP27

Nayer Fouad, CEO, Infinity Power, said, “The acquisition has the potential to bring much needed stability in power supply to African countries that are facing energy insecurity. This is a major step forward for Africa’s future, and a significant move in enabling the shift towards sustainable energy, providing a more stable and secure source of power for its citizens.

“It is also a key milestone in our journey, and is the beginning of the next phase of our plan as we continue working towards creating a truly sustainable ecosystem for green energy across the continent.”

Investors in Infinity Power

Dr Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, COP28 President-Designate, and chairman of Masdar, said, “Through our investment in Infinity Power Masdar is able to extend its reach across Africa and support developing nations on their clean energy transitions. This acquisition will give Infinity Power greater scale to deploy practical climate solutions that deliver measureable outcomes, in line with the COP28 objective of being inclusive, transparent, pragmatic, and results oriented.”

Mohamed Jameel Al Ramahi, CEO, Masdar, said, “This landmark acquisition of Lekela Power will position our Infinity Power joint venture as the market leader in Africa, and is also recognition of the continent’s tremendous renewable energy potential. Greater access to clean energy will enable African nations to develop their economies sustainably while meeting their climate objectives – in alignment with COP28’s goal of delivering inclusive climate progress.”

Lucy Heintz, partner and head of Energy Infrastructure, Actis, said: “We are delighted to announce the successful exit of Lekela. When we established Lekela, we were determined to ensure the business became a role model for what a sustainable business should look like in Africa and we are leaving the business strongly positioned both as a recognised sustainability leader and as a key player in the African energy transition, with a 2.8GW portfolio of projects in operation and development.

Chris Antonopoulos, CEO of Lekela Pwer, said, “We can already see that the backing of Lekela’s new investors, Infinity Power, will make our next chapter an exciting one. We remain committed to delivering clean, reliable power for communities and countries across Africa. To do this we are growing our pipeline, exploring new technologies and will continue to create positive impact for the communities where we operate. We would like to thank Actis and the Mainstream-led consortium for all their support and guidance over the last eight years.

“Together, we grew Lekela from zero to over 1GW of wind power in operation and proved renewable energy has the potential to contribute to Africa’s sustainable future.  We now look forward to working with Infinity Power, as well as its shareholders and stakeholders to continue this work and further accelerate the growth of Lekela.”

Investors in Infinity Group

Samaila Zubairu, Africa Finance Corporation president and CEO, said: “In order to address Africa’s energy crisis in a sustainable and climate responsible manner, the African private and public sectors must work in collaboration with global strategic partners, and the recent acquisition of the largest renewable energy asset in Africa is a significant milestone towards this goal.

“With this acquisition, we emphasize the importance of utilizing steady and affordable power from abundant natural sources to drive a quantum leap in both the scale and diversity of energy solutions. This achievement positions AFC, working with our partners, to establish a 3GW renewable energy platform, accelerate Africa’s instrumental role in reaching global net zero, and build the foundations upon which value addition, industrialisation and economic growth on the continent will emerge.”

Nandita Parshad, MD of the Sustainable Infrastructure Group, EBRD, said: “We are delighted to witness our long-standing partner Infinity Group become the largest renewable energy player in Africa. EBRD is proud to be part of this strategic transaction, which is expected to unlock growth opportunities in Egypt and beyond.  The acquisition of Lekela Power marks a significant milestone for Infinity Power, paving the way for the company to capture ample opportunities in the energy space in Africa, delivering clean and sustainable energy to the continent.”

Key milestones of Infinity Power

Infinity Power was established in 2020 to develop utility-scale and distributed solar energy and wind power projects in Africa.

By developing renewable projects in Africa, Infinity Power aims to improve energy access across the continent, while boosting economic development, and creating much-needed jobs, particularly in remote areas.

The total capacity of Infinity Power operational projects is 1.3 GW, which equates to a reduction of more than 3 million tonnes of CO2 emissions per year using conventional power generation.

The company also has 13.8 GW of projects in the pipeline at different stages of development.

Established in 2015, Lekela Power was previously owned 60 per cent Actis, a global investor in sustainable infrastructure, and 40 per cent by a consortium, led by global wind and solar company Mainstream Renewable Power, called Mainstream Renewable Power Africa Holdings.

Africa’s installed renewable capacity is set to grow from 54GW in 2020 to more than 530GW by 2040, according to the International Renewable Energy Agency (IRENA), with solar PV soaring to 340GW, and wind rising to 90GW. Increasing renewable energy resources will also drive energy access, with almost half of Africa’s population still without access to electricity.

Cantor Fitzgerald, Absa CIB, Norton Rose Fulbright, Al Kamel Law, Ernst & Young and AFRY advised Infinity Power on the transaction.

Absa CIB and MCB acted as the Mandated Lead Arrangers on the acquisition financing facilities.

Masdar celebrates…

In other news, the Shams solar power project, Masdar’s first utility-scale solar project in the region, is celebrating its 10th anniversary this week.

When Shams was launched, it was the largest renewable energy project in the Middle East. Its success paved the way for other clean energy plants in the UAE and the region. The 100-megwatt plant produces enough electricity to power 20,000 UAE homes, and has created over 150 jobs in Abu Dhabi’s Al Dhafra region.

“Masdar has always been the largest shareholder of the Shams power plant. The idea itself came from Masdar,” said Majed Al Awadhi, GM of the Shams Power Company. “So, we can say Shams is the baby of Masdar. It is considered the flagship renewable energy project in the UAE. Shams aspires to become the leader in the industry and across the world.”

#Shams, means ‘sun’ in Arabic ☀️. At #Masdar, it is the name of our pioneering 100MW solar plant #InAbuDhabi, celebrating 10 years of operations.
Watch the next film of our #PowerToChange series, and see how Shams is powering communities & inspiring younger generations. pic.twitter.com/bz2hk0sLgr

— Masdar (@Masdar) March 15, 2023