UAE-based Access Power has joined up with Frances Eren to form Access Infra Africa, an investment vehicle to target the development market for power projects in the African continent.
Under the agreement, Eren will acquire a strategic equity stake in Access Power and a seat on the board of the firm. The new venture is looking to establish a portfolio of schemes in Africa worth a total of more than $500m.
The new consortium has been prequalified by Egypts Ministry of Electricity to submit proposals for both wind and solar projects as part of the countrys 4,300MW direct proposal renewable energy programme.
Reda el-Chaar, chairman of Access Power, says the Egyptian market offers an exciting proposition for the renewable energy sector, and expects the ambitious programme to go ahead due to the demand drivers.
In Egypt, you have a rapidly growing population and a diversified economy, he says. There is lots of demand.
El-Chaar says instability in recent years will not affect the countrys power plans in the long term.
Like many countries, [Egypt] will have ups and downs, he says. But we work within 20-25 year timeframes for IPPs [independent power projects], so two years down will not affect investment strategy.
While Egypts renewables programme has received strong interest, with 109 proposals having been prequalified by the ministry, El-Chaar says the market is large enough to offer lucrative opportunities for many firms.
Competition is there, but the market is big enough for all big players to take a share in the market, he says. Also, we expect a lot of the shortlisted firms to drop out, so there is opportunity to play a major part in the market.
El-Chaar is also bullish about the potential for growth in the renewable energy sector in the face of falling oil prices.
The power sector is not for the short term it is planned on 20, 30, 40 year forecasts it is long-term planning, he says. We saw a dip in oil prices in 2009, but it rebounded. Demand for power remained strong, regardless.
In December, Access Power was awarded a contract to develop Ugandas first solar project as an IPP.
Through its subsidiary, Access Uganda Solar, the firm will develop a 10MW photovoltaic (PV) solar project in Soroti in northeastern Uganda. Once completed, the plant will generate more than 18 million kilowatt hours (kWh) of electricity, which will be able to cater to more than 40,000 households.
Access Power will receive funding from the European Union Infrastructure Trust Fund through the GET FiT solar facility, a development initiative set up to provide support for PV solar schemes.