US firm Renewvia launches Renewvia Energy Africa Holding and seeks to raise $350m

March 25, 2020

Accordingto Jeune Afrique Business+, Renewvia’s CEO, Trey Jarrard, a former partner atinsurer Convex, provided details about hiscompany’s objectives. “Our goal is to install 1,000 off-grid solar powersystems over the next five years in Nigeria and Kenya,” he said. To make thishappen, the company is implementing an “aggressive strategy which also involvescapital markets: in five years, we hope to raise $350m via equity and includinga debt component as well.”

Until nowRenewvia had a project-by-project financing strategy, but going forward it willestablish a holding company named Renewvia Energy Africa Holding which willconsolidate the group’s capital and business activities on the continent. Theupcoming funding round is expected to raise somewhere between $5 and $10m andMr Jarrard hopes that it will eventually trigger exponential growth. 

The CEO islooking to take advantage of regulatory incentives implemented in Nigeria bythe WorldBank, withthe backing of the RuralElectrification Agency,under which energy operators are granted subsidies based on their performance.Kenya also has a programme providing individual, per-project subsidies. Bothcountries protect investors by granting a 20-year exclusivity period for theoperation of energy installations, Mr Jarrard explained.

Accordingto Renewvia, the off-grid solar power market in Africa is a market for thetaking, a fact that has fuelled the company’s ambitions: “It’s a small marketwith few players. A lot of companies aren’t able to obtain financing,” said theCEO, who founded Renewvia in 2008.

Thepartnership agreement signed in March with Dream Projects Incubator (DPI), which will make acapital investment in Renewvia, should accelerate the growth trend. DPI isheaded by KazuomiKaneto, thefounder of PacificoEnergy, a Japaneserenewable energy company which has developeed over 1,300 MW utility scale projectssince 2012. DPI, so far active in the industrial solar powersector and keen to position itself in sub-Saharan Africa’s off-grid solar powermarket, will also help Renewvia reduce its costs via less expensive equipmentpurchases. A special purpose vehicle localised in Mauritius has been set up todirect the Singaporean entity’s investments to the various subsidiaries.

The French DevelopmentAgency andthe GermanCorporation for International Cooperation (GIZ) have already solicited Renewvia for severalprojects. The firm was contacted by the French agency for six projects, forwhich it had a mandate but it struggled to attract private sector players.

Renewviagenerated on a recent project, as for example, an EBITDA of $290,000, for aninvestment of $1.75m.

Renewvia ispotentially interested in West Africa (Benin, Ghana and Liberia are beingtargeted) and in Rwanda and Uganda, two countries where the company alreadyoperates, in the long term, but it is “only considering proposals” for the timebeing.

Renewvia isworking with Nigeria-based firm Detail Commercial Solicitors and its Partner Dolapo Kukoyi. In Kenya, it is usingthe services of MusyokaMurambi & Associates,with Managing Partner AlbertSimiyu Murambi servingas its main contact.