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Promoting the set up of a: REGIONAL CREDITWORTHY INTERMEDIARY OFFTAKER AND POWER TRADING COMPANY

Mission STATEMENT

Africa GreenCo aims to increase private sector investment in energy generation in sub-Saharan Africa by mitigating the credit risks associated with the current lack of creditworthy offtakers. Current weak financial position of utilities and limited choice of an alternate buyer in case of utility default deters private capital. An intermediary aggregator between buyers and sellers can help attract sustainable investments in the power sector on the strength of a multi-buyer model. Its role as a financially sustainable intermediary offtaker and power trading company can also stimulate regional electricity trading and facilitate more efficient use of available and new resources by optimising them on a regional basis. Through its activities Africa GreenCo will increase the supply of, and the demand for, finance for energy projects, and mobilize private sector capital more quickly towards critical and transformative capacity additions, reducing pressure on utilities as well as financial liabilities for sovereign governments.

2x Population growth

5x Increase in GDP

70% Urbanisation

70% Grid access up
from 25%

4x Power Consumption
to 1600 TWh pa

More than $800bn in capital needed
$490 billion
for new generating capacity
$350 billion
for transmission and distribution
Value unlocked by regional approach:
$40 billion
in capital savings from integrated planning
$10 billion
African consumer savings of $10bnpa through lower LCOE
  • Lack of creditworthy counterparties for generation projects scale up
  • Rehabilitation of utilities is key but sustainable and material improvements can only occur in the medium to long term
  • The current project-by-project approach to electrification of the continent is unsustainable
  • The main issues created by the current funding model are that:
  • Support through existing instruments is not sufficient to address funding gap
  • Credit enhancement of projects on a one-off basis adds cost and delays
  • No single project is able to shift the attitude of commercial investors to bankability; a systemic and structural change is required
  • Putting the burden on governments to provide explicit and implicit guarantees or counter-guarantees shifts the creditworthiness issue to the sovereign level
African countries cannot continue to add contingent liabilities against these commitments given their current fiscal position and the medium term macro-economic environment
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Unlike current development efforts which mostly focus on project preparation, advocacy, capacity building or on the financing components for renewable energy generation, Africa GreenCo proposes an introduction of a principal in the market which addresses the core issue of creditworthiness of off-takers and the lack of a viable power market to sell electricity production.

The envisioned entity is an ambitious attempt to help increase the liquidity and scale of regional power trade and develop the power pools in sub-Saharan Africa by providing them with the first ever government co-owned, independently managed and financially sustainable electricity service provider capable of developing a fair and standardised electricity market.

Africa GreenCo would act as intermediary offtaker only and would not manage the physical transmission and distribution of energy. It would not own any of the grid infrastructure or seek to replace existing utilities. Rather than replacing existing structures, it complements them, and can further act as a bridge to any future energy regional market liberalization and energy trade integration. Africa GreenCo would help liquify and expand energy power markets by acting as a credit risk-mitigating intermediary for privately financed power projects through long-term power purchase agreements (PPAs) and back-to-back power sale agreements (PSAs) to various offtakers including state utilities.

Africa GreenCo aims to learn from, and where possible replicate, the dynamics of more advanced power markets, in particular building on the experience of the Power Trading Corporation of India (PTC India). PTC India was also set up in order to act as a credit risk mitigating intermediary offtaker for privately-financed regional power generators. In the process, it catalysed the entire Indian regional power sector trading market.

Challenges

2x Population growth

5x Increase in GDP

70% Urbanisation

70% Grid access up
from 25% in SADC

4x Power Consumption
to 1600 TWh pa

More than $800bn in capital needed
$490 billion
for new generating capacity
$350 billion
for transmission and distribution
Value unlocked by regional approach:
$40 billion
in capital savings from integrated planning
$10 billion
African consumer savings of $10bnpa through lower LCOE

Context

  • Lack of creditworthy counterparties for generation projects scale up
  • Rehabilitation of utilities is key but sustainable and material improvements can only occur in the medium to long term
  • The current project-by-project approach to electrification of the continent is unsustainable
  • The main issues created by the current funding model are that:
    • Support through existing instruments is not sufficient to address funding gap
    • Credit enhancement of projects on a one-off basis adds cost and delays
    • No single project is able to shift the attitude of commercial investors to bankability; a systemic and structural
    • change is required
    • Putting the burden on governments to provide explicit and implicit guarantees or counter-guarantees shifts the creditworthiness issue to the sovereign level
African countries cannot continue to add contingent liabilities against these commitments given their current fiscal position and the medium term macro-economic environment.

Strategy

Unlike current development efforts which mostly focus on project preparation, advocacy, capacity building or on the financing components for renewable energy generation, Africa GreenCo proposes an introduction of a principal in the market which addresses the core issue of creditworthiness of off-takers and the lack of a viable power market to sell electricity production.

The envisioned entity is an ambitious attempt to help increase the liquidity and scale of regional power trade and develop the power pools in sub-Saharan Africa by providing them with the first ever government co-owned, independently managed and financially sustainable electricity service provider capable of developing a fair and standardised electricity market.

Africa GreenCo would act as intermediary offtaker only and would not manage the physical transmission and distribution of energy. It would not own any of the grid infrastructure or seek to replace existing utilities. Rather than replacing existing structures, it complements them, and can further act as a bridge to any future energy regional market liberalization and energy trade integration. Africa GreenCo would help liquify and expand energy power markets by acting as a credit risk-mitigating intermediary for privately financed power projects through long-term power purchase agreements (PPAs) and back-to-back power sale agreements (PSAs) to various offtakers including state utilities.

Africa GreenCo aims to learn from, and where possible replicate, the dynamics of more advanced power markets, in particular building on the experience of the Power Trading Corporation of India (PTC India). PTC India was also set up in order to act as a credit risk mitigating intermediary offtaker for privately-financed regional power generators. In the process, it catalysed the entire Indian regional power sector trading market

Africa GreenCo Team

kata-profile

Ana
Hajduka

Founder & CEO

Ana is qualified as a lawyer in both England & Wales and the State of New York, and is an infrastructure and energy professional with more than 14 years’ experience in a variety of transactions including project finance, public-private partnerships and project development, working on energy and infrastructure projects in emerging markets.

Ana trained with Allen & Overy LLP and went on to work for Fulbright & Jaworski LLP and Trinity International LLP, advising on a diverse range of projects within the energy sector, predominately in Sub-Saharan Africa. In March 2015, Ana was appointed by the UNECE as the Team Leader responsible for a Project Team (comprising about 30 specialists) in charge of developing international renewable energy PPP standards as part of the Sustainable Energy for All agenda.

cathy-oxby

Cathy
Oxby

Commercial Director

Cathy has more than 14 years professional experience in the infrastructure and renewable energy sectors, both as an adviser and an equity investor. She trained at Allen & Overy LLP where she worked on a diverse range of project finance transactions spanning energy and infrastructure before moving into a commercial role at HSBC Infrastructure Fund (which became InfraRed Capital Partners). After 6 years of structuring and negotiating equity investments in a wide variety of public-private partnerships and renewable energy projects, she established her own consultancy to help developers, investors and project companies deliver well- structured and efficiently run investments by assisting them through all stages of project development, implementation and operation and also acted as a consultant to the World Bank.

Lovemore
Chilimanzi

Technical Director

Lovemore’s core skills are in power system strategic management, operations and electricity trading having worked in this area for over 30 years. He has operated hydro and thermal power stations and transmission networks and has negotiated, implemented and managed numerous power purchase agreements. He is a founder member of SAPP and was a key member in formulation, implementation, monitoring and revising the SAPP control performance criteria and the SAPP regional trading rules that enabled launching of a competitive electricity market in SADC. Lovemore is a senior member of the South African Institute of Electrical Engineers (SAIEE) and has lectured power utility risk management and operations management in an MBA programme for more than nine years.

Penny Herbst

Penny
Herbst

Strategy Director

Penny Herbst has over 30 years of experience in an utility environment most of this in Eskom’s Treasury department, where she was exposed to a diverse set of financial, commercial and legal structures that emanate from its operations. Amongst others she has managed Eskom’s foreign and interest rate risk, money and capital market investments, project finance transactions, and the structuring of projects to mitigate risks associated with projects in Africa. She led the formation of Eskom’s Development Finance unit where in the role of Development Financing Manager she was instrumental raising, in excess of $6bn, from DFI and related institutions. This included funding for Eskom‘s first renewable projects where she spent some time in Eskom’s Renewables Unit working on bridging the gap between financing and implementation.

cathy-oxby

Douglas ‘Pug’
Bennet

Chief Investment Officer

Pug Bennet is the former COO of GuarantCo’s Management Company and was involved with GuarantCo since 2007, taking GuarantCo from a trial initiative to the leading local currency guarantor in such markets. As one of two original employees and always part of the management team, his role included a mixture of client and business focussed work with many ground breaking transactions. This experience required a flexible, practical, persistent and solution focussed approach and provided an understanding of both the private and public sector operators in such markets.

He started his career as a lawyer and has been advising, structuring, financing and arranging transactions, mainly in emerging and frontier markets, for over 20 years.

Johannes
Baake

Finance Director

Johannes Baake is an experienced financial analyst with over 13 years’ experience in banking, project and development finance. During 10 years at KfW IPEX Bank, he worked in various roles. As a part of a highly specialized modelling team, he worked on dozens of large international project finance in various sectors. He also spent time at the KfW Climate Change Fund, where he designed a cash flow model for a portfolio of CDM projects, leading to his Master Thesis on “Innovative Financing Structures for programmatic Clean Development Mechanism”.

In 2016 Johannes started to work as an independent consultant and founded in 2017 financial modelling boutique b.linked GmbH which mainly advises large banks and funds on financial structuring energy projects in Africa.

Advisory Committee

Tantra Thakur

Tantra
Thakur

Special Advisor

Tantra is the former Head of PTC India with more than 40 years of experience with government, private and global companies in India, South Asia and SE Asia. Under his stewardship as Chairman and Managing Director from 2000-2012, PTC India became the first electricity trading company in India/ South Asia. He led the company to diversify into financial services through PTC India Financial Services Limited and co- sponsored the first Energy Exchange in India.

He now serves as a non-executive Member of Board of several companies including InfraCo. He has provided advisory services to many other companies in the Energy Sector in India including Fortnum India and the Essar Group. He was deputed to UNHCR for performance audit on behalf of the UN Board of Auditors. He served as a member of the Prime Minister’s Task Force on the socio-economic development of Jammu & Kashmir in India.

haakon

Haakon
Olafsson

Special Advisor

Haakon has 26 years’ experience
within commodities and energy working for leading banks, utilities and trading houses. He recently led the successful establishment of Statkraft’s power trading business in India.  He has 18 years’ senior management experience instigating, building, restructuring and leading profitable free-standing businesses in Europe and emerging markets and has provided high level advice on several energy related new ventures. He has an MBA from London Business School and a B.Sc. (Hons) in Economics & Finance.

Having managed front, back, middle office, logistics, technology, finance, legal and regulatory teams, he brings a deep understanding of the totality of a trading business, optimisation of physical resources. He has a firm knowledge of most forms of electricity generation as well as emissions and bulk energy storage.

Alex
Simalabwi

Non-Executive Director

Alex is the Executive Secretary, Head of Africa Coordination Unit & Global Lead on Climate Resilience for the Global Water Partnership Southern Africa. Alex is an international development professional with extensive expertise in water resources management, climate change adaptation, economic development, finance, investment strategy design and public policy.

Through his career he has developed partnerships and collaborated with various international agencies: World Bank, UNDP, UNICEF, UNEP, UNFCCC, Green Climate Fund, UN Water, GEF, FAO, WMO, UNESCO, AfDB, ADB, EIB, IADB, SADC, ECOWAS, ECCAS, EAC and others.  He has worked with more than 20 countries in Africa, to develop investment plans on integration of water into economic national development.

Tantra Thakur

Philippe
TNiyongabo

Advisory Committe Member

Philippe is a well-known African
energy expert. A former Head of Energy Division within the Department of Infrastructure and Energy, African Union Commission, he developed key energy programs including the Program for Infrastructure Development in Africa (PIDA-energy sector), the Geothermal Risk Mitigation Facility (GRMF) and the Geothermal Regional Program for the Eastern African Countries, the establishment of Africa-EU Energy Partnership which is the most successful of the eight partnerships Joint Africa-EU Strategy launched in 2007, the SE4ALL Africa Hub Action Agenda and Investment Prospectuses for African countries and participation at the elaboration of the Africa Renewable Energy Initiative supported by G7 and adopted at the COP21 in Paris, France in December 2015
.

haakon

Abyd
Karnmali

Advisory Committee Member

Abyd is Managing Director, Climate Finance at Bank of America Merrill Lynch and is point person for the bank’s $10 billion Catalytic Finance Initiative as well as part of the team that oversees the bank’s broader financial commitment to mobilise US$125bn for low-carbon investment opportunities by 2025. He has worked for twenty-five years on climate policy, carbon markets, and new approaches to climate finance and was selected in 2013 to serve as one of two inaugural private sector representatives to the Board of the Green Climate Fund. He also has advisory roles with the Global Innovation Lab for Climate Finance and the finance committee of the Sustainable Energy for All initiative. His non-profit roles include the Board of Directors for The Climate Group and chairing the Board of Just Energy, an Oxfam-seeded initiative.

James
Bond

Advisory Committee Member

James is an emerging market infrastructure and climate finance expert with over 30 years experience at the Green Climate Fund, MIGA, the World Bank, the International Finance Corporation and in industry.  He has extensive expertise in project and sovereign finance in emerging economies, particularly in infrastructure, energy and climate-related investments. He also serves a non-executive director on the boards of several companies and foundations.

Africa GreenCo Team

kata-profile

Ana
Hajduka

Founder & CEO

Read Bio

cathy-oxby

Cathy
Oxby

Commercial Director

Read Bio

Lovemore
Chilimanzi

Technical Director

Read Bio

penny-herbst

Penny
Herbst

Non-Executive Director

Read Bio

 

James
Bond

Read Bio

phillippe

Philippe
Niyongabo

Read Bio

tantra-thakur

Tantra
Thakur

Read Bio

Abyd
Karmali

Read Bio

Grant Support Provided by

Recommended by the SE4All Finance Committee Report

Supported by

Supported by

Supported by

Supported by

Supported by

Media

Cathy Oxby quoted in the IPS Daily Report– October 2017

ESI Elites 2017 – Ana Hajduka – January 2017

Interview with ESI Africa – March 2016

Interview with ESI Africa – September 2016

Brookings BlogJune 2016

Petrolium Africa – April 2016

ICA Africa – November 2015

ICA Africa – November 2015

African Investor – June 2016

COP 23

We are delighted to be presenting at COP23, “Africa GreenCo: A PPP to De-Risk and Scale Up Sustainable Investments in the African Power Sector.” Click to view full details below.

Venue: EUPavilion, Bonn Zone

Date/Time: 14 November 2017, 16:00-17:30

Africa GreenCo CEO Ana Hajduka cycling from Spain to Morocco for COP22, Moving for Climate NOW.

Downloads

 


Africa GreenCo Feasibility Study


Africa GreenCo Feasibility Study (French Version)


Africa GreenCo Feasibility Study Annexes

 


Africa GreenCo Feasibility Study


Africa GreenCo Feasibility Study Annexes

Procurement

 
 


Africa GreenCo Feasibility Study


Africa GreenCo Feasibility Study Annexes

Contact

Suite 1, 3rd Floor
11-12 St. James’s Square
London
SW1Y 4LB

South Africa:
Fountain Court, 232 Waterkloof Road, Brooklyn, Pretoria, 0181

Ana Hajduka (Africa GreenCo Founder and CEO)
ana.hajduka@africagreenco.com
+44778 920 4363