GCC investors pile in to North African energy

UAE and GCC investors are gearing up to funnel buckets of cash into various African energy projects.

There are different types of financiers coming into the continent, spanning sovereign wealth funds to high-risk, high-return developers, according to Cornelius Matthes, the managing director of the Mena region for the Italian firm Building Energy.

Mr Matthes said North Africa was the obvious choice for many investors based on common culture and language. And players such as Abu Dhabi-based Masdar are looking to expand in their existing North African branches.

A Masdar executive declined to give figures, but said that the company was looking to expand but would “maintain and increase the value” of its assets.

“For commercial projects, we are interested to expand further in Egypt, Morocco and Mauritania,” Maged Farouk, Masdar’s senior manager for special projects, said at the Africa Energy Forum (AEF) in Dubai. He said this would be in addition to the projects the company already had in play in those countries.

In Mauritania, Masdar developed a 15 megawatt solar photovoltaic plant that came online two years ago. Mr Farouk said Masdar had another project in development in the country, funded by the Mauritanian government, but declined to give details. In January, Masdar announced seven solar projects in the country with a total capacity of 12MW. They are expected to be completed next year.

Masdar has also bid for multiple large-scale renewable energy projects throughout Morocco, although unsuccessfully. However, the company announced in April that it would provide 18,000 home solar systems to more than 900 villages in the country.

“[Masdar] is also interested in special projects,” Mr Farouk said, adding that the company did not have a regional preference. “We go wherever we are needed.”

Saudi Arabia’s Acwa Power said its focus was to create “clusters”, or pockets of power projects. The company’s chief executive, Paddy Padmanathan, said that Acwa had entered into Morocco and would look to go into neighbouring territories. “We would consider Morocco as a hub and then possibly go into Tunisia,” he said.

Although Acwa has several projects on the books for Egypt, it considers the country to be a part of its GCC cluster.

“But still North Africa is by far not the main focus. Many of the players are looking well beyond,” Mr Matthes said.

An emerging player, Abu Dhabi-based TCQ Power, is taking a different strategy than the large-scale projects seen from Masdar and Acwa. “Smaller projects means less competition,” said its chief executive Karim Nasser.

The company, only three years old, has a 128MW independent production facility in Freetown, Sierra Leone, and said further collaborations for similarly-scaled projects in the region were under discussion.

Interest from the UAE and GCC into the African energy sector is what prompted the organisers of the AEF to host the event in Dubai for the first time in 17 years.

Simon Goslin, the managing director of the AEF organiser Energy Net, said the UAE was a model for Africa given its major expansion over the past two decades. “It is an inspiration for what these African leaders should be thinking about and what can be achieved,” he said, adding that 15 per cent of the 1,600 delegates were investors coming from the GCC region.


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