British International Investment (BII) is joining Norfund, the Norwegian Investment Fund for developing countries, in its joint venture with Scatec ASA to provide capital for Africa’s hydropower sector.
BII, formerly known as CDC Group Plc, said Thursday this will be the largest hydropower investment in the 74-year history of the development finance institution, with up to $200 million of capital committed over the next several years.
Norfund is seeding the partnership with its existing share in the joint venture with Scatec and further capital commitments of up to $100 million over the next several years.
“Hydropower is critical for providing clean baseload and peaking power, especially in landlocked countries in Africa, as the continent countries transition away from fossil fuels towards a net zero future,” said Chris Chijiutomi, Managing Director, Head of Infrastructure Equity, Africa and Pakistan at BII.
“BII along with its partners will play a key role in providing inclusive and sustainable finance to support hydropower in sub-Saharan Africa,” he said.
Norfund was instrumental in building the company known as SN Power into a leading hydropower company in developing countries. SN Powerr was then sold to the Norwegian renewable energy developer Scatec in January 2021. The two sides agreed to collaborate on SN Power’s projects in Africa, under new Scatec ownership, whereby Norfund retained a 49% stake, which will now be shared with BII.
Norfund and BII now together hold a 49% stake in Scatec’s African hydropower portfolio, which includes a mixture of operating assets as well as a number of assets under development. These include the proposed 205MW Ruzizi III hydropower plant, which will provide power to Rwanda, Burundi and DRC; the 120MW Volobe hydropower plant in Madagascar; and the 350MW Mpatamanga project in Malawi among others.
The investment extends BII’s and Norfund’s existing commitments and partnership through Globeleq, a 2.3GW power producer in which the two are shareholders, and the joint investment the two development finance institutions have in H1 Capital – a South-African renewables investment and development company.