Finland invests in a considerable increase of wind power in Africa

Finland invests in a considerable increase of wind power in Africa

IFC, the corporate financing branch of the World Bank, has recently invested Finnish money in a project package that aims at vastly increasing the wind power capacity in Africa. In addition, Finland and IFC will enter more in-depth cooperation by providing new support to develop innovative energy projects in the poorest countries.

Anne-Mari Virolainen, Minister for Foreign Trade and Development, will sign a technical assistance cooperation agreement with International Finance Corporation IFC at the annual meeting of the World Bank, which is currently taking place on Bali, Indonesia.

In practice, the EUR 1.54 million support granted by Finland will be used to develop climate projects especially in the poorest countries. Among others, the money can be used to investigate the utilisation of wave energy and electricity storing opportunities or to develop entirely new earning models.

”More than one billion people still lack electricity, and it is not at all indifferent for the globe whether their electricity is generated using fossil fuels or from renewable sources. This was ultimately indicated by the IPCC’s most recent report”, says Minister Anne-Mari Virolainen.

”In the developing countries, electricity supply is also a question of human rights, and the lack of electricity is like a handbrake preventing social development”, Virolainen points out.

Picture of Lake Turkana Wind Power Project.
The number of turbines at the Lake Turkana wind farm in Kenya makes it the largest wind farm in Africa. Finland will invest via IFC in a power project using mainly wind power and in terms of nominal power, the new power stations will be ten times bigger. Photo: Finnfund

Wind power equalling the supply of Loviisa nuclear power station

The new cooperation agreement continues the work of the Climate Change Program that was set up by Finland and IFC last year. In the Climate Change Program, IFC will invest EUR 114 million of Finnish taxpayers’ money in commercial climate and energy projects in the developing countries in the next four years. According to plans, IFC will pay back the funds, including interest, to Finland with returns on investment in 25 years.

”The role of the Finland-IFC Climate Change Program goes beyond its size in euros as an instrument for mitigating and adapting to climate change. Program funds will be invested early on in the projects and with moderate revenue expectations so as to also attract private capital looking for higher revenues”, Virolainen says.

The Climate Change Program made its first, three-million euro investment in a large-scale project by Gaia Energy, a Moroccan energy company. The aim of the company is to build 22 mainly wind-operated power stations in nine African countries: Ivory Coast, Ghana, Ethiopia, Kenya, Tanzania, Nigeria, Tunisia, Algeria and Morocco. 

The nominal power of the stations will be three gigawatts, so they will increase the existing wind power capacity in Africa by approximately 50 per cent.  Even according to a careful estimate, given the wind conditions in Africa the annual electricity production of modern wind power stations of this size would be seven terawatt hours, i.e. as much as the total generated by the two nuclear reactors of Fortum’s nuclear power station in Loviisa.

IFC has also invested its own funds in development work for building the power stations. Together with Gaia Energy, the company intends to attract privatecy investments for a project package whose implementation needs several billions of euros. The role of Finland’s financial support is to help mobilise private capital and open the markets for developing countries.

 

Inquiries:

· Juha Kirstilä, Special Adviser to the Minister for Foreign Trade and Development, tel. +358 (0)40 552 8200 (NOTE: At Bali time zone, time difference to Finland +5 hours)

· Henri Horn, Senior Adviser for Development Policy (energy sector), tel. +358 295 350 059

· Nina Kataja Senior Adviser for Development Policy (financial investments)  +358 295 351 785

The Ministry for Foreign Affairs’ e-mail addresses are in the form firstname.surname@formin.fi.

 

Read more about the Finland–IFC Blended Finance for Climate Program.