Burges Salmon advises on Africa’s second largest solar mini-grid portfolio project-financing

EDFI ElectriFI and REPP have provided LSL 150,000,000 financing to innovative social enterprise “OnePower”

18 January 2022

Burges Salmon has advised the EU-funded Electrification Financing Initiative (EDFI ElectriFI, administered by the EDFI Management Company) and the UK Government-funded Renewable Energy Performance Platform (REPP, administered by Camco Clean Energy) on the LSL 150,000,000 senior debt and equity investment into Sotho Minigrid Portfolio SPV. This transaction sees EDFI ElectriFI and REPP each provide LSL 75,000,000 through a combination of senior debt and equity investment, and is one of the largest project-financed mini-grid transactions in Africa to reach financial close.

Sotho Minigrid, established by renewable energy provider OnePower Lesotho, aims to provide affordable and reliable electricity services to off-grid villages in Lesotho. EDFI ElectrifFI and REPP, as co-lenders, are facilitating first-time access to clean electricity for 20,000 people in rural Lesotho.

With a rural electrification rate estimated at below 20 per cent, Lesotho is one of the least electrified countries in the world. The funds will be used by Sotho Minigrid to develop, construct and operate a portfolio of solar mini-grids in rural Lesotho. The electricity generated by the portfolio will provide life-changing first-time access to clean solar electricity for 20,000 people living in off-grid rural homes in Lesotho, a further 7 health clinics, as well as schools and small enterprises. 

The solar mini-grids developed by Sotho Minigrid are solar PV hybrids with battery storage and limited LPG backup generation. The hybrid design ensures 24-hour, year-round electricity supply.

The Burges Salmon team advising EDFI ElectriFI and REPP on this transaction was led by Stuart McMillan (Partner) and Luke Addison (Associate) from the firm’s Project Finance team. Both Stuart and Luke have extensive experience advising on renewable energy transactions, specifically including the financing of solar projects in Africa. Danny Lee (Partner) and Niall Mackle (Associate) provided specialist advice on the equity investment, Harrison Folland (Solicitor) assisted on the debt financing, and James Horton (Director) advised on construction issues. 

Toep Van Mierlo, in-house Legal Counsel of EDFI ElectriFI, says: “It has been an absolute pleasure working with Stuart and his team. Their proactivity, thoughtfulness and dedication helped bring a technically challenging project in Lesotho to successful completion. Working with the project finance team, as well as their corporate colleagues, they worked seamlessly to negotiate and overcome legal hurdles, providing high quality transactional legal advice in their friendly yet exceedingly professional style. We look forward to working with them again.” 

Ben Hugues, Investment Director and REPP Lead at Camco Clean Energy, adds: "REPP’s latest investment in OnePower’s Sotho Minigrid Portfolio SPV reflects our belief that this mini-grid project will have a lasting and transformative impact in rural Lesotho, impacting tens of thousands of people. We would like to thank Burges Salmon, who assisted on this transaction, displaying great patience and a high level of responsiveness.” 

 

Key contact

Stuart McMillan

Stuart McMillan Partner

  • Head of Infrastructure
  • Banking and Finance
  • Energy finance

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