AXIAN Energy Secures $30 Million Loan for Renewable Projects in Africa

The loan will support the group’s expansion plan to deliver more than 460 MW of green power across the continent.

by Motoni Olodun

AXIAN Energy, a pan-African group that operates in the renewable energy sector, has received a $30 million senior secured loan facility from the Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company. The loan will support AXIAN’s expansion plan to deliver more than 460 megawatts (MW) of utility-scale renewable energy generation capacity across Africa over the next decade.

AXIAN Energy was established in 2001 as a leader in oil and gas distribution in Madagascar. Since 2017, the group has embarked on a strategic plan to reposition itself and diversify its activities in the clean energy sector. AXIAN Energy has subsidiaries in Senegal, Mozambique, Tanzania, Sao Tome & Principe, Cabo Verde, Gabon, Rwanda, and other countries, where it develops, builds, and operates solar, wind, and hybrid power plants for public utilities and commercial and industrial customers.

The EAIF loan will help AXIAN Energy acquire, develop, and execute greenfield utility-scale solar projects in various geographies, according to a press release. The loan will also benefit the group’s companies that focus on distributed energy in rural areas, where there is little or no access to stable power for households and businesses.

Benjamin Memmi, CEO of AXIAN Energy, said: “This facility marks a pivotal moment in our journey toward sustainable development and energy inclusion across Africa. The infusion of EAIF funds will not only propel our transition to renewable energy but will also bolster our unwavering dedication to delivering clean and accessible power to communities throughout the continent.”

Tidiane Doucoure, Director at Ninety One, the fund manager of the EAIF, said: “With this financing, we are targeting the challenges associated with the development of bankable projects in emerging markets. In the current inflationary environment with high construction and financing costs, developers in emerging markets need more than ever the support of financiers to think outside the box to address the many obstacles faced. We are thrilled to back AXIAN Energy and their ambitious energy transition plan, which will support the strategic repositioning of the group and enable the provision of clean energy across the continent.”

The EAIF is a debt fund that provides a variety of debt products to infrastructure projects promoted mainly by private sector businesses in Africa and parts of the Levant. The fund helps create the infrastructure framework that is essential to sustain economic stability, business confidence, job creation, and poverty reduction. It has supported 96 closed infrastructure projects across nine sectors in over 20 African countries.

The EAIF loan to AXIAN Energy is part of a growing trend of financing renewable energy projects in Africa, as the continent seeks to increase its share of green power and reduce its dependence on fossil fuels. According to the International Renewable Energy Agency (IRENA), Africa’s renewable energy capacity grew by almost 2% in 2020, reaching 49.3 gigawatts (GW). Solar and wind accounted for 84% of the continent’s new renewable capacity additions last year.

However, Africa still faces significant challenges in achieving universal energy access and meeting its climate goals. IRENA estimates that Africa needs to install 1.3 terawatts (TW) of renewable energy capacity by 2050 to provide electricity to all its people and support its low-carbon development. This requires a massive increase in investment, innovation, and collaboration among all stakeholders.

AXIAN Energy and the EAIF are among the actors that are contributing to this effort, by bringing innovative, affordable, and sustainable energy solutions to millions of Africans. Their partnership demonstrates the potential and the benefits of renewable energy for the continent’s future.

Source: Ecofin Agency

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