Page 10 - AfrElec Week 42 2021

AfrElec RENEWABLES AfrElec

Globeleq acquires ARC for

Renewable Energy

SOUTH AFRICA SOUTH Africa-based Globeleq, an Africa initially investing $11.5mn. Other members
focused utility scale power plant investor, has of the lending syndicate included the Africa
acquired ARC for Renewable Energy (ARC), Development Bank (AfDB), Asian Infrastruc-
which owns and operates a 66-MW solar PV ture Investment Bank, Arab Bank, CDC, Europe
plant in Benben Solar Park near Aswan in Upper Arab Bank, Finance in Motion, FinnFund, ICBC
Egypt, for an undisclosed sum. and Austria’s OeEB.
The ARC plant was developed by the SECI ARC’s buyer Globeleq is 70% owned by CDC
Energia, Enerray and Desert Technologies and 30% owned by Norway’s Norfund, the sov-
consortium as part of the second round of the ereign investment fund for developing coun-
Egyptian government’s feed-in tariff (FiT) pro- tries. During the acquisition process, Globeleq
gramme and achieved commercial operation on supported the original developers and lenders to
November 4, 2019. It provides clean electricity achieve the final take-over certificate under the
to the Egyptian Electricity and Transmission EPC contracts and ensure the project performs
Co. (EETC), the national monopoly electricity optimally. ARC will be connected to Globeleq’s
grid operator, under a 25-year power purchase remote monitoring centre in Cape Town, South
agreement (PPA). Africa, and will benefit from the extensive expe-
The plant was funded by a syndicate of lend- rience of its African-based operations team and
ers led by International Finance Corporation complemented by a talented team based in Cairo
(IFC), the World Bank’s private sector arm, and Aswan. ™
Kenya Power and Kenya Airways

to get money from Treasury

KENYA KENYA’S electricity utility and national airline budget funding because of their role in “fueling
are set to receive funding from the National economic growth and creation of employment.”
Treasury in the next financial year, which will It took those comments into account when
start in July 2022, to support their recovery. finalising the report, saying: “This is duly noted
The Treasury has agreed to inject cash into and will be done during sector allocations.”
Kenya Power and Kenya Airways to strengthen Earlier this month, Treasury officials held a
the financial position of the two firms, on the three-day public hearing to solicit comments on
grounds that the performance will play a key sectoral proposals to be considered during the
role in the country’s economic recovery. Kenyan formulation of the budget bill.
economic activity has slowed considerably over Kenya’s government is obligated to draw up
the last year and a half as a result of the corona- the budget for the next financial year and submit
virus (COVID-19) pandemic. it to Parliament for approval by March 31, 2022.
The government did not allocate the fund This is a month earlier than the typical deadline
necessary to bail out the two companies in the because of elections slated for August next year.
2021/2022 fiscal year. Consequently, concern In the last fiscal year, which ended in June
has been rising that worsening cash flow could 2021, Kenya retreated from an earlier plan,
hurt their operations and slow down the recov- approved by the International Monetary Fund
ery of the economy at large. (IMF), for long-term reforms to solve cash flow
According to a report from Business Daily, challenges facing state-controlled firms and
stakeholders have faulted the Kenyan govern- parastatals. Instead, it began leaning toward
ment for not drawing up recovery and bailout bailouts – and signaled its commitment with a
plans for the two financially troubled firms. move by the Treasury to dispense an additional
Their concerns were covered in the Treasury’s $100mn to Kenya Airways. The national carrier
Budget Review and Outlook Paper (BROP), has frequently pleaded for additional cash from
which was published in September 2021. the government, as an anchor shareholder, in
The paper quoted stakeholders as saying that the hope of rising above its precarious finances.
the two companies ought to be supported via w™

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