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Tuesday, 21 March 2023

Infinity Power acquires wind power platform Lekela as part of expansion plans

Infinity Power is now Africa’s largest renewables player: Infinity Power — a joint venture between our friends at Infinity and UAE renewables player Masdar — has closed its acquisition of Africa-focused wind power platform Lekela Power, according to a press release (pdf). The transaction gave Lekela an enterprise value of USD 1.5 bn, the parent company of one of the selling shareholders said in a statement yesterday.

What it bought: Infinity Power now has a combined operational portfolio of 1.3 GW with a pipeline of 13.8 GW, making it the largest renewable energy company in Africa. Lekela currently has 1 GW of wind projects in Egypt, Senegal and South Africa in its portfolio and has another 1.8 GW in the pipeline.

Eight months in the making: Infinity signed an agreement last July to acquire 100% of the company from its two shareholders, private-equity firm Actis and Irish renewables developer Mainstream Renewable Power.

Where the money came from: The transaction was financed through equity investment from Infinity Power’s shareholders and debt from Absa Corporate and Investment Banking (Absa CIB) and the Mauritanian Commercial Bank, according to the press release. The Africa Finance Corporation and European Bank for Reconstruction and Development (EBRD) are key shareholders in Infinity, the latter of which has invested more than USD 100 mn since 2020.

Lekela wants to quadruple its energy production capacity: The company plans to invest USD 6 bn to increase its capacity to 4 GW over the next four years. A third of this will go to Egyptian projects, a third to South Africa and the remainder to other African markets.

Infinity Power has been active on green energy: Only this month, Infinity Power and Germany’s Conjuncta inked a MoU with Mauritania to build a massive green hydrogen plant in the West African country. The company is also part of a consortium of companies that includes Hassan Allam Utilities and the UAE’s Masdar building a 10 GW onshore wind farm in Egypt that will begin construction in 2024. The wind farm — which will cost at least USD 10-12 bn to build — will be one of the largest in the world with the capacity to produce nearly 48k GWh of clean energy a year.

Advisors: Cantor Fitzgerald, Absa CIB, Norton Rose Fulbright, Al Kamel Law Firm, Ernst & Young and AFRY advised Infinity Power on the transaction. Absa CIB and MCB were the mandated lead arrangers on the acquisition financing facilities. Citi and Clifford Chance provided advice to Actis and Mainstream.

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