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Africa Sustainable Independent Power Producer

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Impact Capital Partner’s Overview

FOR INSTITUTIONAL INVESTORS ONLY – This Independent Power Producer (IPP), is an energy solutions provider based in the USA with operations in West Africa. Over the past 13 years they have transitioned their thermal operations from heavy oil and liquified petroleum gas to natural gas + they built their own private pipeline network + their long-term ambition is to deliver 100% clean electricity across Africa by 2035 + net-zero emissions by 2050.

Their operations reflect their firm commitment to increasing access to reliable, sustainable and cost-effective electricity in Africa + they are actively seeking to expand their operations across the African continent with a vision to be the leading sustainable energy solution provider in Africa.

  • They currently operate in Ghana and also have early stage projects in Burkina Faso, Mali and Guinea + they are actively seeking to expand their operations across the African continent.
  • They build, own and operate distributed generation installations and natural gas distribution infrastructure, selling power and natural gas to mines, industries and utilities.

Established IPP with Successful Operating History

This IPP is an established African energy company with 3 operating power plants (+112MW), a dedicated port facility, gas pipelines and power transmission infrastructure. A capacity expansion is underway which will increase capacity at existing plants by over 50MW and construct 3 new plants with a capacity of 100MW while expanding pipeline network by over 300km. The company has successfully built and operated 5 power plants in Ghana. The Sponsor is also pursuing growth opportunities in other African countries including Guinea, Mali and Burkina Faso. Additionally, the company is embarking on the next phase of development involving conversion of its power plants to combined cycle, renewable energy projects and sale of natural gas to its clients to support conversion of company trucks from diesel to LNG with significant environmental and economic benefits.

  • Mission
    • Develop sustainable energy solutions in Africa
    • Emphasize the training and development of local expertise
    • Utilize appropriate technologies in a safe, efficient and reliable manner
  • Vision
    • To be the leading sustainable energy solution provider in Africa

Stabilize The National Grid

Following the recent election in Ghana, the new Government is prioritizing the stabilization of the national grid by relocating power plants inland and extending the national gas pipeline network to provide the required fuel. This IPP is the only private owner of natural gas pipelines in Ghana and also has the largest pipeline network. The Government of Ghana has requested this IPP to extend its existing 20” natural gas pipeline to Kumasi through the construction of a new 102km 20” natural gas pipeline (“PP02” or the “Kumasi Pipeline”). Payment for this infrastructure will come via a base price reduction of 40% in the IPP’s cost for natural gas, with this revised price becoming effective in July 2021 for the full tenor of the current Gas Supply Agreement (“GSA”) to December 2037 (16 years).

Opportunity Details*

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Existing Power Plants

  • This IPP is currently the only embedded generation provider in Ghana. Over the past thirteen years, it has commissioned five distributed generation plants of which four are currently owned, operated and maintained by the company, including…
  • Bogoso Plant
  • Unilever Facility
  • Chirano Plant
  • Tarkwa Plant
  • Damang Plant

Existing Midstream Assets

This IPP has also developed its own fuel midstream facilities for efficient and effective operations of its various thermal plants and is the only private owner of natural gas pipelines In Ghana.

Sustainability

Basing their operations on transition technologies and fuels, as an interim step towards their long term objectives, allows this IPP to develop the basic energy infrastructure required to provide clients access to reliable, sustainable and cost-effective energy. Over the next decade, they plan to convert their assets from transition solutions to low carbon energy solutions.

  • Transition Phase
    • Expansion – Building and operating the basic energy infrastructure (natural-gas-fired power generation, natural gas midstream solutions and electricity transmission solutions) to deliver reliable, sustainable and affordable electricity and natural gas to their clients.
    • Conversion – Facilitating the conversion of clients’ equipment (stationary and mobile) from heavy hydrocarbons to natural gas fuels as a transition to hydrogen fuels.
    • Development – Developing wind and hydro-electric energy solutions to be built and operated during the Low Carbon Phase.
  • Low Carbon Phase
    • Renewables – Switching a majority (>85%) of their electricity solutions to PV solar, wind and hydro-electric solutions.
    • Hydrogen – Switching client equipment (stationary and mobile) to hydrogen fuels.
    • Batteries – Deploying alternative batteries such as cryogenic storage and pumped hydro.

Additional Sustainability & Impact Highlights

  • Over the past 13 years this IPP has transitioned their thermal operations from heavy oil and liquified petroleum gas to natural gas / Liquid Natural gas (LNG). LNG is considered a cleaner option to other fossil fuel resources, as it releases up to 50% less CO2 than coal and 20-30% less than oil. Additionally, compared to other types of fuel, there are negligible sulfur dioxide (SO2), Nitrogen Oxide (NOx), mercury (Hg), and particulate emissions.-
  • This IPP has significantly reduced the stress to the National power grid, and is now a net contributor to the grid + plans to further stabilize the national grid.
  • Community – By developing natural gas infrastructure they seek to improve the livelihoods of stakeholders in their communities through provision of reliable, affordable and sustainable energy.
  • Community Engagement – Their numerous community engagement activities enables them to develop strong relations with members and representatives of these municipalities, including:
    • Training of locals to work in our operation areas
    • Developing alternative livelihood programs for project affected persons
    • Donating to local community projects and organizations
    • Holding frequent youth career and empowerment workshops
    • As an expression of the firm’s commitment to the environment, they have planted over 150,000 teak stumps along their natural gas pipeline as of July 2020, in order to reclaim the land. The exercise engages the surrounding communities by recruiting and employing locals for the planting of the teak, showing the firm’s commitment to serving and positively impacting the communities in which it operates.
  • Employment – They are committed to supporting employment in their local communities and fostering a culture of accountability and transparency, which strengthen the organization and increases productivity.

Socio-Economic Influence

  • The pipeline project will greatly impact on the socio-economic status of the local communities, the municipal/district and the Western Region as a whole. The Western Region is one of the deprived regions of the country with low coverage of social amenities as well as a low standard of living. It is anticipated that social structures, income levels and economic wellbeing, infrastructure (roads, education, and health) will be significantly improved in the project areas.
  • As is common with the advent of any project, it is expected that the gas pipeline project will create employment opportunities directly and indirectly by stimulating the local economy. The hospitality industry, light industry, trading and banking are all likely to thrive during the implementation of the gas pipeline project. The catchment area competencies are needed, hence apart from the specialized areas dealing directly with oil and gas there is labor which will be sourced directly from these communities.

UN Sustainable Development Goals

  • SDG 5: Gender Equality
  • SDG 7: Affordable & Clean Energy
  • SDG 8: Decent Work & Economic Growth
  • SDG 10: Reduced Inequalities

Additional Resources

  • IPP’s Name & Website
  • Access to IPP’s DATA ROOM – Upon Request
    • Information Memorandum
    • Financial Model
    • Term Sheets
    • Ghana Ministry of Energy Gas Sales Agreement 3/10/21
    • Sustainability & Low Carbon Ambition Statement
Location Map
Tarkwa Plant visit October 2018

About Impact Capital Partners

At Impact Capital Partners, our mission is to connect institutional capital with the growing impact investment market to address the world’s most pressing challenges. By utilizing impact investments, institutional investors are able to generate positive, measurable social and environmental impact alongside a financial return. We are constantly finding new impact investment opportunities in both emerging and developed markets, targeting market-rate returns. Schedule a call with us HERE if you’re interested in learning more about our impact opportunities.

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Disclaimers

1 Prospective investments that are sourced through a Foreign entity or Broker-Dealer (“FBD”) are offered to U.S. Institutional Investors through an engagement with Pinnacle Capital Securities, LLC (“Pinnacle”), member FINRA / SIPC, who is authorized to chaperone the FBDs under SEC Rule 15a-6.

2 All listed investment opportunities are intended for INSTITUTIONAL INVESTORS ONLY.

3 All listed investment opportunities may or may not be profitable. They are speculative investments and, as such, involve a high degree of risk. Nothing contained above shall constitute a recommendation or endorsement to buy or sell any security or other financial instrument.

4 For Funded Opportunities, there is no guarantee that future investments will be similar.

5 Investment in a non-listed LLC involves significant risks including but not limited to: ownership is restricted; no secondary market; limitation on liquidity, transfer and redemption of ownership interest; distributions made may not come from income and, if so, will reduce the returns, are not guaranteed and are subject to management discretion.

6 Impact Capital Partners is dependent upon its Fund Mangers and FBDs to select investments and conduct operations.

7 Total facility amounts represent the proposed amounts that would be available to the borrower under an agreement. This amount may change over time.

8 Interest rates include contractual rates and accrued fees where applicable and are gross of fund fees and expenses. This metric is not a measure of investment performance nor is it necessarily indicative of distributions that the Fund Manager may provide to investors.

9 All industry updates are provided to Impact Capital Partner by their Fund Managers and FBDs.

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