British International Investment Plc (BII), the UK’s development-finance arm, is embarking on its first renewable energy project in Tanzania.
According to Nick O’Donohoe, CEO of BII, the firm has agreed to initially lend $15 million to Meridiam SAS’s Rift Valley Energy for the development of 7.6 megawatts of wind and small-scale hydro projects. This investment could potentially increase to $25 million.
“These new installations will provide electricity to 170,000 consumers, many of whom were previously not connected to the grid,” O’Donohoe explained.
BII’s move aligns with efforts by various financial institutions to increase electricity access in Africa, tackle climate change, and develop infrastructure.
The African Development Bank estimates that the continent requires between $130 billion and $170 billion annually for infrastructure development.
Currently, only 37% of Tanzania’s 66 million people have access to electricity, underscoring the urgent need for such investments, noted BII.
Rift Valley Energy, which already operates small hydropower projects and Tanzania’s sole wind farm, Mwenga, was acquired by Meridiam last year.
The company is advancing projects that could potentially generate up to 30 megawatts of power and has separately invested in 100 megawatts of assets in Kenya.
Highlighting BII’s commitment to East Africa, O’Donohoe mentioned the firm’s substantial investments in the region, including $1.3 billion allocated to African businesses last year, with $355 million directed to East Africa alone. BII’s East Africa portfolio currently stands at $1.4 billion.
As a UK government-owned entity, BII has made significant investments in African companies, including Liquid Telecommunications Holding Ltd. and power producer Globeleq Inc.
