Mainstream shows west Africa potential

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Richard Heap
September 19, 2014
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This content is from our archive. Some formatting or links may be broken.
Mainstream shows west Africa potential

Armchair investments are all too easy. It is simple to rule out countries or continents in an instant without visiting them.

This is arguably the case in west Africa, which has an image aspolitically unstable and as an emerging hotbed for terrorism. The current Ebola outbreak clearly does not help.

But despite all these difficulties it is good to see some positive investment news.

Earlier this week, Mainstream Renewable Power announced that it has signed a deal with Swiss wind developer NEK Umwelttechnik to buy the 225MW AyitepaWind project on the east coast of Ghana. The project is scheduled to start generating power in early 2016, and is set to require total investment of $525m. It is due to reach financial close next year.

And it is this last aspect that is most interesting. This is not just another large project in an emerging market. This could open up west Africa to major wind investors for the first time.

But, with so many emerging markets out there, what is so interesting about the region?

One potential worry for institutional investors is that projects in Africa are smaller than they are used to. However, to rate a project’s importance in pure monetary terms is to miss a trick. In Ghana, a scheme of 225MW would generate approximately 10% of the country’s total electricity generation capacity.

The AyitepaWind scheme more than holds its own against Africa’s other high-profile wind projects, too. It is not far off the capacity of Kenya’s 310MW Lake Turkana, which is the largest wind farm planned in Africa and where construction is due to start next year. And it is larger than any wind farm currently operational in Africa.

It is also seen as a key project to increase the amount of renewables used in Ghana. The country’s Ministry of Energy & Petroleum said it fully supports the scheme, with all the necessary financial and legal incentives provided through its Renewable Energy Act 2011. In a continent that often attracts attention for instability, such government backing is key.

And then there are the demographics. Two-thirds of sub-Saharan Africans can’t access electricity, a figure that rises to 85% in rural areas. The wind sector therefore has huge potential to provide competitively priced energy for the 1.1billion people in this region.

The value in such projects, therefore, is not just delivered in purely monetary terms. And, with the African wind market still in its early stages, investors are highly reliant on the local knowledge that is needed to make such schemes happen.

That’s why the partnerships that underpin these deals really matter. And that’s why we’re confident that AyitepaWind will go ahead.

NEK Umwelttechnik has had a presence in Ghana for more than 15 years; and Mainstream already has three wind and solar farms operational in South Africa, with three more large wind projects due to go into construction between now and December.

That on-the-ground experience counts. And in turn, provides investors with the confidence to continue to invest.

Slowly but surely, developers are gaining the experience to tell investors the true story of west Africa behind the media headlines.

Armchair investments are all too easy. It is simple to rule out countries or continents in an instant without visiting them.

This is arguably the case in west Africa, which has an image aspolitically unstable and as an emerging hotbed for terrorism. The current Ebola outbreak clearly does not help.

But despite all these difficulties it is good to see some positive investment news.

Earlier this week, Mainstream Renewable Power announced that it has signed a deal with Swiss wind developer NEK Umwelttechnik to buy the 225MW AyitepaWind project on the east coast of Ghana. The project is scheduled to start generating power in early 2016, and is set to require total investment of $525m. It is due to reach financial close next year.

And it is this last aspect that is most interesting. This is not just another large project in an emerging market. This could open up west Africa to major wind investors for the first time.

But, with so many emerging markets out there, what is so interesting about the region?

One potential worry for institutional investors is that projects in Africa are smaller than they are used to. However, to rate a project’s importance in pure monetary terms is to miss a trick. In Ghana, a scheme of 225MW would generate approximately 10% of the country’s total electricity generation capacity.

The AyitepaWind scheme more than holds its own against Africa’s other high-profile wind projects, too. It is not far off the capacity of Kenya’s 310MW Lake Turkana, which is the largest wind farm planned in Africa and where construction is due to start next year. And it is larger than any wind farm currently operational in Africa.

It is also seen as a key project to increase the amount of renewables used in Ghana. The country’s Ministry of Energy & Petroleum said it fully supports the scheme, with all the necessary financial and legal incentives provided through its Renewable Energy Act 2011. In a continent that often attracts attention for instability, such government backing is key.

And then there are the demographics. Two-thirds of sub-Saharan Africans can’t access electricity, a figure that rises to 85% in rural areas. The wind sector therefore has huge potential to provide competitively priced energy for the 1.1billion people in this region.

The value in such projects, therefore, is not just delivered in purely monetary terms. And, with the African wind market still in its early stages, investors are highly reliant on the local knowledge that is needed to make such schemes happen.

That’s why the partnerships that underpin these deals really matter. And that’s why we’re confident that AyitepaWind will go ahead.

NEK Umwelttechnik has had a presence in Ghana for more than 15 years; and Mainstream already has three wind and solar farms operational in South Africa, with three more large wind projects due to go into construction between now and December.

That on-the-ground experience counts. And in turn, provides investors with the confidence to continue to invest.

Slowly but surely, developers are gaining the experience to tell investors the true story of west Africa behind the media headlines.

Armchair investments are all too easy. It is simple to rule out countries or continents in an instant without visiting them.

This is arguably the case in west Africa, which has an image aspolitically unstable and as an emerging hotbed for terrorism. The current Ebola outbreak clearly does not help.

But despite all these difficulties it is good to see some positive investment news.

Earlier this week, Mainstream Renewable Power announced that it has signed a deal with Swiss wind developer NEK Umwelttechnik to buy the 225MW AyitepaWind project on the east coast of Ghana. The project is scheduled to start generating power in early 2016, and is set to require total investment of $525m. It is due to reach financial close next year.

And it is this last aspect that is most interesting. This is not just another large project in an emerging market. This could open up west Africa to major wind investors for the first time.

But, with so many emerging markets out there, what is so interesting about the region?

One potential worry for institutional investors is that projects in Africa are smaller than they are used to. However, to rate a project’s importance in pure monetary terms is to miss a trick. In Ghana, a scheme of 225MW would generate approximately 10% of the country’s total electricity generation capacity.

The AyitepaWind scheme more than holds its own against Africa’s other high-profile wind projects, too. It is not far off the capacity of Kenya’s 310MW Lake Turkana, which is the largest wind farm planned in Africa and where construction is due to start next year. And it is larger than any wind farm currently operational in Africa.

It is also seen as a key project to increase the amount of renewables used in Ghana. The country’s Ministry of Energy & Petroleum said it fully supports the scheme, with all the necessary financial and legal incentives provided through its Renewable Energy Act 2011. In a continent that often attracts attention for instability, such government backing is key.

And then there are the demographics. Two-thirds of sub-Saharan Africans can’t access electricity, a figure that rises to 85% in rural areas. The wind sector therefore has huge potential to provide competitively priced energy for the 1.1billion people in this region.

The value in such projects, therefore, is not just delivered in purely monetary terms. And, with the African wind market still in its early stages, investors are highly reliant on the local knowledge that is needed to make such schemes happen.

That’s why the partnerships that underpin these deals really matter. And that’s why we’re confident that AyitepaWind will go ahead.

NEK Umwelttechnik has had a presence in Ghana for more than 15 years; and Mainstream already has three wind and solar farms operational in South Africa, with three more large wind projects due to go into construction between now and December.

That on-the-ground experience counts. And in turn, provides investors with the confidence to continue to invest.

Slowly but surely, developers are gaining the experience to tell investors the true story of west Africa behind the media headlines.

Armchair investments are all too easy. It is simple to rule out countries or continents in an instant without visiting them.

This is arguably the case in west Africa, which has an image aspolitically unstable and as an emerging hotbed for terrorism. The current Ebola outbreak clearly does not help.

But despite all these difficulties it is good to see some positive investment news.

Earlier this week, Mainstream Renewable Power announced that it has signed a deal with Swiss wind developer NEK Umwelttechnik to buy the 225MW AyitepaWind project on the east coast of Ghana. The project is scheduled to start generating power in early 2016, and is set to require total investment of $525m. It is due to reach financial close next year.

And it is this last aspect that is most interesting. This is not just another large project in an emerging market. This could open up west Africa to major wind investors for the first time.

But, with so many emerging markets out there, what is so interesting about the region?

One potential worry for institutional investors is that projects in Africa are smaller than they are used to. However, to rate a project’s importance in pure monetary terms is to miss a trick. In Ghana, a scheme of 225MW would generate approximately 10% of the country’s total electricity generation capacity.

The AyitepaWind scheme more than holds its own against Africa’s other high-profile wind projects, too. It is not far off the capacity of Kenya’s 310MW Lake Turkana, which is the largest wind farm planned in Africa and where construction is due to start next year. And it is larger than any wind farm currently operational in Africa.

It is also seen as a key project to increase the amount of renewables used in Ghana. The country’s Ministry of Energy & Petroleum said it fully supports the scheme, with all the necessary financial and legal incentives provided through its Renewable Energy Act 2011. In a continent that often attracts attention for instability, such government backing is key.

And then there are the demographics. Two-thirds of sub-Saharan Africans can’t access electricity, a figure that rises to 85% in rural areas. The wind sector therefore has huge potential to provide competitively priced energy for the 1.1billion people in this region.

The value in such projects, therefore, is not just delivered in purely monetary terms. And, with the African wind market still in its early stages, investors are highly reliant on the local knowledge that is needed to make such schemes happen.

That’s why the partnerships that underpin these deals really matter. And that’s why we’re confident that AyitepaWind will go ahead.

NEK Umwelttechnik has had a presence in Ghana for more than 15 years; and Mainstream already has three wind and solar farms operational in South Africa, with three more large wind projects due to go into construction between now and December.

That on-the-ground experience counts. And in turn, provides investors with the confidence to continue to invest.

Slowly but surely, developers are gaining the experience to tell investors the true story of west Africa behind the media headlines.

Armchair investments are all too easy. It is simple to rule out countries or continents in an instant without visiting them.

This is arguably the case in west Africa, which has an image aspolitically unstable and as an emerging hotbed for terrorism. The current Ebola outbreak clearly does not help.

But despite all these difficulties it is good to see some positive investment news.

Earlier this week, Mainstream Renewable Power announced that it has signed a deal with Swiss wind developer NEK Umwelttechnik to buy the 225MW AyitepaWind project on the east coast of Ghana. The project is scheduled to start generating power in early 2016, and is set to require total investment of $525m. It is due to reach financial close next year.

And it is this last aspect that is most interesting. This is not just another large project in an emerging market. This could open up west Africa to major wind investors for the first time.

But, with so many emerging markets out there, what is so interesting about the region?

One potential worry for institutional investors is that projects in Africa are smaller than they are used to. However, to rate a project’s importance in pure monetary terms is to miss a trick. In Ghana, a scheme of 225MW would generate approximately 10% of the country’s total electricity generation capacity.

The AyitepaWind scheme more than holds its own against Africa’s other high-profile wind projects, too. It is not far off the capacity of Kenya’s 310MW Lake Turkana, which is the largest wind farm planned in Africa and where construction is due to start next year. And it is larger than any wind farm currently operational in Africa.

It is also seen as a key project to increase the amount of renewables used in Ghana. The country’s Ministry of Energy & Petroleum said it fully supports the scheme, with all the necessary financial and legal incentives provided through its Renewable Energy Act 2011. In a continent that often attracts attention for instability, such government backing is key.

And then there are the demographics. Two-thirds of sub-Saharan Africans can’t access electricity, a figure that rises to 85% in rural areas. The wind sector therefore has huge potential to provide competitively priced energy for the 1.1billion people in this region.

The value in such projects, therefore, is not just delivered in purely monetary terms. And, with the African wind market still in its early stages, investors are highly reliant on the local knowledge that is needed to make such schemes happen.

That’s why the partnerships that underpin these deals really matter. And that’s why we’re confident that AyitepaWind will go ahead.

NEK Umwelttechnik has had a presence in Ghana for more than 15 years; and Mainstream already has three wind and solar farms operational in South Africa, with three more large wind projects due to go into construction between now and December.

That on-the-ground experience counts. And in turn, provides investors with the confidence to continue to invest.

Slowly but surely, developers are gaining the experience to tell investors the true story of west Africa behind the media headlines.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.