DJIBOUTI – Africa Finance Corporation (AFC), Climate Fund Managers (CFM), FMO, the Dutch entrepreneurial development bank and Great Horn Investment Holdings (GHIH) have announced a landmark investment for the construction and operation of a 60MW wind farm in the Ghoubet area, near Lake Assal in Djibouti.

Development of the 60MW wind project kicked-off in 2017 by AFC, CFM, as manager to Climate Investor One’s (CIO) Construction Equity Fund, FMO (together “the Consortium”) and local developer Great Horn Investment Holdings (GHIH).

Institutional expertise of individual Consortium members played a defining role in the Project’s development. AFC, being an experienced developer and financier of infrastructure and renewable energy projects, took the lead developer and project manager role.

CFM, a blended finance fund manager, took the co-developer and the technical lead role due to their financing and technical expertise.

FMO has been responsible for Insurance and Environmental, Social and Governance (ESG). GHIH provided local support in terms of engagement with the Government.

The project is owned and operated by Red Sea Power Limited SAS, a Djibouti-based limited liability company. The project is expected to have its commercial operations start in 2022.

“Renewable energy is a key focus within our investment strategy, and this project will not only be a unique opportunity within our portfolio but will also have a significant impact on Djibouti’s energy generation, improving their reliance on HFO,” Samaila Zubairu, President and CEO at AFC commented.

“Developing long-term strategic partnerships that ensures sustainable development of projects, such as the 60MW Djibouti Wind Farm Project, remains at the cornerstone of AFC’s strategy”, says Oliver Andrews, Chief Investment Officer at AFC.

Jaap Reinking, Director Private Equity of FMO said that the investment in Djibouti Wind was a perfect fit with FMO’s strategy because of its contribution to the company’s impact and CO2-reduction goals.

He said that the project will significantly reduce GHG emissions in the HFO dominated (90%) electricity sector of Djibouti.

“This project will help to facilitate a clean energy shift in Djibouti by providing sustainable energy and reducing the reliance on domestic thermal power production and power imports,” said Tarun Brahma, Director and Head of Investments at CFM.

“A social and economic development cannot be achieved without a reliable, affordable, competitive and cost-effective energy solution,” commented Aboubaker Omar Hadi, Chairman of GHIH.

“With the ports, the railway, industries and other transport infrastructure projects we have developed and developing, the availability of such energy is of paramount importance, in order to ensure the gains are consolidated.’

The east African country aims to transition towards 100% renewable energy-based electricity production and reduce its emissions by 40% by 2030.