MIGA insures Actis' energy investment in South Africa

MIGA, a member of the World Bank Group, has issued guarantees in support of the construction, ownership and operation of two solar photovoltaic power plants (Aggeneys and Konkoonsies II) in South Africa’s Northern Cape, and two wind power plants (Golden Valley and Excelsior) in the Eastern Cape and Western Cape.

MIGA’s guarantees are covering 90% of BioTherm’s equity investment for up to $46.9 million in the photovoltaic solar plants and $68.9 million in both wind production plants. The guarantees provide protection against the risks of transfer and inconvertibility, expropriation, breach of contract, and war and civil disturbance for up to 15 years.

Investment firm Actis acquired BioTherm – a South Africa-based, pan-African renewable energy business – from Denham Capital last year. BioTherm owns 394 MW of renewable projects in construction and operations in South Africa and Kenya. MIGA currently supports Actis on projects across multiple countries, providing about $900 million in guarantees. The guarantees in South Africa are part of Actis’ overall risk management strategy in the energy sector.

When operational later this year, the new plants will have a combined installed capacity of 288 MW, and the electricity will be sold to the public utility Eskom under 20-year PPAs signed in 2018.

“MIGA’s political risk insurance plays an important role in attracting institutional capital to renewable projects across our markets with high growth potential,” Actis energy and infrastructure director Colin FitzRandolph explained. “Actis is pleased to build on our strong relationship with MIGA to deliver additional renewable power to the South African grid and to foster partnerships in the local communities surrounding the projects.”

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