Interview with shareholders of new ECP-backed power and water investment company
When the pan-African fund manager Emerging Capital Partners (ECP) became a shareholder in the Eranove Group in 2008, its investment was a catalyst for the accelerated growth of the public services management and utilities player. Recently, the Eranove Group got another boost, as ECP was joined by three shareholders to create an investment company called ECP Power & Water Holding, which was founded to support the group’s continued growth. The following is an interview with each of the shareholders of ECP Power & Water Holding.
1. How much is the new company investing in Eranove and what is the vision for its development?
Vincent le Guennou, co-CEO of ECP: Through an investment of $250 million, ECP Power & Water Holding has become the reference shareholder of the pan-African industrial group Eranove. The investors in ECP Power & Water Holding include ECP; A.P. Moller Capital, a fund manager specialised in the infrastructure sector and developing markets; DEG, the German development finance institution dedicated to the private sector; and Investment Fund for Developing Countries (IFU- Denmark), the Danish development finance institution for private sector investments in developing countries. The vision is enable the long-term development of the pan-African industrial group Eranove, a major player in the management of public services and the production of electricity and drinking water, in which ECP has been the largest shareholder since 2008.
2. What was the impetus for the creation of ECP Power & Water Holding and bringing in new investors?
Vincent le Guennou: As a pan-African fund manager, ECP has established its position as a long-term investor in the water and electricity sectors on the continent. By bringing in multiple shareholders, we have provided the Eranove Group with a growth lever to finance the group’s long-term development and further expanding its strong focus on sustainable and responsible development. There exists a common vision amongst the shareholders that ECP Power & Water Holding can support sustainable development on the African continent through the supply of reliable and cost-effective energy with low carbon emissions. Access clean water and electricity remains a priority for corporations and households alike throughout the continent.
3. Are there any immediate acquisition targets in Africa for Eranove?
Mackenzie Schow, deputy head of equity Africa for DEG: The creation of ECP Power & Water Holding through the participation of multiple reference international investment partners provides the Eranove Group with a strong lever for financing its long-term growth. Through the Eranove Group, the company will seek multiple opportunities to increase the supply of clean water and reliable and cost-effective electricity with low carbon emissions while maintaining Eranove’s commitment to sustainable and responsible development. In electricity generation, we have two baseload powerplants under construction and a strong pipeline of hydroelectric plants. Eranove is developing the 73 MW Asokh Energy hydroelectric plant and the 15 MW Louetsi hydroelectric plant, both in Gabon, the 56 MW Kénié hydroelectric IPP in Mali, and the 200 MW Sahofika hydroelectric IPP in Madagascar.
4. What will be the new company’s commitments to renewable energy?
Torben Huss, CEO of Investment Fund for Developing Countries (IFU- Denmark): Eranove will further strengthen its commitment to social, societal and environmental responsibility, and to develop projects to meet the growing demand for electricity on the continent, as well as to reduce the carbon footprint of its existing subsidiaries, which has already been reduced by 25% per kWh produced since 2015. The new company will put a priority on clean energy investments as Eranove underscores its commitments to the green transition and promoting sustainable and responsible development throughout Africa. The company has several projects under study and is proactively building a pipeline of renewable energy projects in hydroelectric, solar and biomass. These projects will make it possible to continue reducing emissions after 2025.
5. How much will gas-fired power plants figure into the growth strategy of Eranove?
Jens Thomassen, partner at A.P. Moller Capital: Within Africa, natural gas remains a viable bridge fuel to a low-carbon future and a vital feedstock to address the continent’s chronic energy poverty and electricity shortages. It is abundant, cheap and has lower carbon emissions than alternative fossil fuels like diesel and coal. Through independent power projects like the CIPRE thermal plant and the 390 MW Atinkou power plant Eranove is building in Côte d’Ivoire, natural gas provides a solution to Africa’s electricity access problem and enables the continent’s industrial, technological and agricultural development.
In the case of Atinkou, this technology is efficient in both economic and environmental terms, as it reduces gas consumption and CO2 emissions and is in line with the Côte d’Ivoire’s vision of clean, high-quality and affordable energy, especially as the plant will use new-generation turbines that save on natural gas consumption.
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