Norwegian leading renewable energy company, Scatec, last week announced that it had completed the sale of its entire stake in an 8.5MW plant in Rwanda to local firm Fortis Green Fund and pan-African firm Axian Energy Green for $1.38 million.
The renewable energy developer had, since 2014, been the largest shareholder of the plant that is located some 60km from Kigali on land that belongs to the Agahozo-Shalom Youth Village (ASYV).
This educational and residential community was launched to mainly support prphaned youths affected by the 1994 Genocide against the Tutsi.
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Scatec specialises in renewables development in emerging economies. However, following the acquisition, the firm also announced that it had "officially discontinued all operations in Rwanda.”
"We continue to deliver on our strategy to consolidate our portfolio through divestment of assets in non-core markets, and recycling capital into new investments in renewable energy,” Scatec chief executive, Terje Pilskog, said following the announcement.
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He added; "We are very satisfied with the closing and would like to thank the teams in Scatec, Fortis, Axian, and other parties involved for a successful transaction. We are confident that the new owners will take good care of the solar power plant and continue to deliver clean renewable energy to Rwanda for many years to come.”
Who are the new owners?
Fortis Green Renewables Investment Management, a renewable energy investment firm currently investing out of its Green Fund I, and AXIAN Energy, a division of the Pan-African Group AXIAN, on the same day announced that they "were pleased” to acquire the stakes.
The transaction was completed on July 30th, 2024, with Hogan Lovell's supporter as legal advisor for the buyers.
Under the development, Fortis Green Fund I Rwanda Holdings Ltd holds 51 percent of the shares in the plant, while NEA Rwanda Ltd, a subsidiary of AXIAN Energy, holds the remaining 49 percent.
NEA Rwanda Ltd also owns 100 percent of the shares in Scatec Solar Rwanda and provides operational and maintenance services for the project through its expertise.
A strategic investment
According to Fortis Green Renewables, the new investment represents a significant step in the development of Green Fund I, providing access for investors to another "stable and steady operational asset” located in the Rwandan market.
For AXIAN Energy, the acquisition marks its entry into the Rwandan market and reinforces its commitment to energy inclusion in Africa.
"We are pleased to add Gigawatt Rwanda to the Green Fund I portfolio, our second operational asset in the Rwandan market. Fortis Green Renewables is committed to the development and operation of clean and renewable energy for the African continent and this asset fits perfectly into our vision", said Benito Grimaudo, Managing Director of Fortis Green Renewables Investment Management.
"Great partners are the key to our success and we could not be more pleased to be entering into this transaction with the team at AXIAN Energy. Additionally, we are honored to be partnering with the Agahozo-Shalom Youth Village - an organization doing incredible work with the most vulnerable children in Rwanda,” he added.
For Benjamin Memmi, chief executive of AXIAN Energy cluster, the acquisition is part of AXIAN Energy's strategy to diversify and expand its portfolio of renewable energy assets:
"The acquisition of shares in the Rwamagana solar power plant marks our first operation in the Rwandan market. We are thrilled about this collaboration with our local partner Fortis Green Renewables, with whom we share a common ambition: to provide sustainable and accessible energy solutions that improve the daily lives of local communities."
Memmi maintained that the solar power plant, with a capacity of 8.5 MW DC, provides reliable power to nearly 140,000 beneficiaries through its 25-year power purchase agreement with the Rwanda Energy Group (REG).
With more than 28,000 solar PV panels on a 50-acre site, the project was the first grid-scale solar power plant connected to the region's power grid and has relatively improved access to clean and renewable energy in Rwanda.
Figures from the International Renewable Energy Agency state that Rwanda had 25 MW of deployed solar at the end of 2023, the same figure recorded for the last five years.
In February, the European Union secured a raw materials deal with the country, which is expected to support the expansion of solar in Rwanda.