Category Archives: General post

General posts

Financing the Transition to Renewable Energy

The rise of renewable is no news; but the transition is not so clear for many actors in the sector, both enthusiasts and those impacted by the shift. Harvard Business Review has recently been looking deeper into the question of financing  the transition to renewable energy from two different perspectives: coal workers and industrial firms.

What If All U.S. Coal Workers Were Retrained to Work in Solar?

Young coal workers, in particular, should consider retraining for a job in solar now. In fact, Research from Oregon State University suggests most coal workers should start thinking about retraining now.

The study quantified the costs and benefits of retraining such workers in solar technology and explores different alternatives to finance the shift. It identifies four different ways of financing such a shift from individual funding options, company sponsored retraining, state driven programmes and federal government initiatives.

It concludes that in general after retraining, most technical workers would make more in the solar industry than previously in coal because there is a wide variety of employment opportunities in the solar industry, and that the annual pay is attractive at all levels of education, with even the lowest skilled jobs paying a living wage.

 

How Industrial Firms Invest in Renewable Energy, Affordably

Big companies have been buying a lot of clean energy;  but making it work in terms of costs and accounting can be a hurdle for industrial companies. HBR draws lessons from Owens Corning execs and how they laid out the strategy to get over the hurdles that industrial companies face when investing in renewable energy in order to add value  to the company, and the environment.

Ghana Capital Partners is Awarded Best African Focused Private Equity Firm 2016

Ghana Capital Partners  is pleased to announce that it has been awarded Best African Focused Private Equity Firm 2016 at the Wealth and Finance International Awards.

GCP award

The awards celebrate top performing businesses, individuals and departments on today’s fund landscape. These Awards highlight the game changing methods and stunning results achieved across the industry. The final winners were chosen by a combination of votes gathered from industry partners and in-house research carried out by Wealth and Finance International.

 

GCP Solar appointed as official solar light supplier to Asa Baako Music Festival, Western Region, Ghana – 4 to 6 March 2015

 

In UN’s Year of Light, GCP Solar has been appointed the official solar light supplier to the Asa Baako Music Festival in Ghana, 4 March 2015.

In a sign of their commitment to helping reduce energy poverty and provide sustainable light, GCP Solar has partnered with the organisers of Asa Baako Music festival to distribute solar lights and solar mobile phone chargers at the festival over the independence day weekend in Ghana.

Asa Baako was launched in March 2011, in the spectacular fishing village of Busua in Ghana’s Western Region. It was here, where festival organisers from the UK and Ghana, joined together with local residents, to create a 2-day celebration of local arts and culture. Since then, Asa Baako has grown from one stage and a few hundred people, to a programme featuring the now legendary Jungle party, beach parties and a weekend of activities from surfing, art exhibitions, treks, tours, yoga, cinema for an audience of over 2,000 people.

Mr. Kofi Debrah of the Asa Baako organising committee said. “We are delighted to appoint GCP Solar as our sole solar light distributor. It is great that we can provide access to light for the 100 or so of the festival attendees that will be sleeping in tents. Also, there are many more coming from remote villages that also do not have lights.”

Mr. Sidney Yankson, founder of GCP Solar said, “ GCP Solar is happy to support this great festival of music and arts. Our solar light supplier, Nokero, has a distinguished track record in supporting the arts as they supported the Power The World concert a few years back during which Linkin Park performed. GCP Solar is looking forward to developing a long-term relationship with the festival.”

About GCP Solar

GCP Solar is a leading solar company in Africa. GCP Solar is a distributor of hand-held solar lanterns and roof top solar systems. Our aim is to provide safe, sustainable and environmentally friendly light solutions to the 400 million people living in Africa without light. In Ghana up to 5 million people (approximately 30% of the population) do not have access to the main power grid.

GCP Solar is a distributor of the Nokero® suite solar products, such as hand-held solar lights and mobile phone chargers.

About UN’s Year of Light

On 20 December 2013, the UN General Assembly 68th Session proclaimed 2015 as the International Year of Light and Light-based Technologies (IYL 2015). In proclaiming an International Year focusing on the topic of light science and its applications, the UN has recognised the importance of raising global awareness about how light-based technologies promote sustainable development and provide solutions to global challenges in energy, education, agriculture and health. Light plays a vital role in our daily lives and is an imperative cross-cutting discipline of science in the 21st century.

(Learn more at www.light2015.org)

About Asa Baako

Asa Baako is a music and arts festival in Western Ghana.

(Learn more at www.asabaako.com)

Didier Drogba – Ivory Coast and Chelsea with his N200

Linkin Park – Power the World – N200

 

Sidney Yankson (CEO) attends a special presentation by the African Development Bank, the African Economic Outlook 2014, at New York University

Sidney Yankson (CEO) was invited to attend a special presentation by the Africa Development Bank (ADB) on 13 October 2014. The main theme of the evening was the global value chains and Africa’s industrialisation.

The event took place at New York University Africa House an interdisciplinary institute devoted to the study of contemporary Africa, focusing on economic, political, and social issues on the continent. The Africa Development Bank was founded in 1964 and has fifty-three African country shareholders. Their mission is to promote sustainable economic growth and reduce poverty in Africa.

Sidney commented that, “The ADB’s report provides a fantastic overview of the opportunities in Africa today.  Most of the countries they review have projected annual GDP growth in excess of 7%. That is phenomenal.

The ADB suggested that there are challenges to overcome, but in the long term African countries and companies will prevail.

The NYU professor suggested that Africa is resilient and will bounce back from the current Ebola crisis.

Therefore, the future looks bright, but there will be challenges.”

Besides the ADB special presentation, Sidney has attended a few other conferences whilst in New York and Washington. On 15 October Sidney was at a meeting in Washington DC discussing commercially operating minigrid systems with the US State Department, USAID, World Bank and the UN Foundation. The meeting allowed participants to recap on the High Impact Opportunity initiatives, membership and co-ordination. There were discussions about focusing on High Impact Initiatives and the upcoming input from DFID, African Development Bank and the World Bank.

Sidney will attend a further event on the 16-17 October that will comprise of a workshop focusing on proven private sector business models that are already in operation and leading the way in mini-grid development.

Ghana thinks big on small-scale solar

For almost five decades, hydroelectric power from the Volta region has been Ghana’s energy backbone, while the nascent oil and gas industry has recently risen up the agenda. But solar power could play an increasingly important role.

With over 5 million households off-grid, market potential for solar energy in Ghana is calling investors’ attention to expand mini-grids in rural and peri-urban areas.

Yet, business sustainability and return on investments remain question marks despite the attractive legal framework which followed Ghana’s Renewables Energy Act 2011. To date, modalities to offset feed-in tariffs are still unclear while doubts continue to cast over the capacity of Electricity Company of Ghana (the national electricity off-taker) to pay independent power producers (IPPs).
Some industry actors are however hopeful. Sidney Yankson, CEO of the Africa focused private equity boutique Ghana Capital Partners (GCP), currently developing a 28MW solar power plant (costing $56million), does not deny these arguments but remains strongly confident in advocating for solar. He told Africa Energy that solar energy is becomingly increasingly viable from a financial perspective also in Ghana, “both for commercial and residential purposes. The price of solar PV panels keeps decreasing and the appeal of a reliable energy source, powered by the sun, whose installation price will decrease – unlike the conventional electricity – cannot be underestimated.
Click here to read the full article.

Why Impact Investments will ensure a brighter future for Africa

Identifying the worlds most pressing issues can be a challenge. At GCP Solar we focus on providing safe and sustainable light solutions to the 400 million people living in Africa without light. The Head of Impact Investing Initiatives at the World Economic Forum (May 2014), Abigail Noble discussed the challenges of impact investments. Currently the average private equity deal is around US$36m and the average investment impact deal is around US$2m. For private equity firms to fully engage in impact investing it costs more to do. There is the bottom line measuring their fiscal performance financial profit, and then the second bottom line measuring the performance in the terms of positive social impact. Moreover, as the size of the deal is smaller, more consideration is needed in the terms of fee structures and due diligence.

Should impact investors anticipate market returns? Yes – a range of returns can be expected such as patient capital, whereby an investor will be willing to make a financial investment in a business with no expectation of turning a quick profit, substantial rewards will come further down the road. The Acumen Fund, a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of poverty, are cautious about stating that they’re opting for the long-view, some investors only make 0-1% returns. Impact private equity firms like LeapFrog make +20% quartile of returns. Leapfrog invests for the NextBillion, investing in high-growth companies in Africa and Asia, as well as delivering financial services to emerging consumers. These investors need to consider their priorities in the terms of social impact and legacy; are there equity needs in the short-term? Or can a longer perspective be taken?

One could then argue that if impact investments focus more on financial returns, could less profitable investments with strong social impacts be left behind? Noble argues that there is a risk. Given positive selection bias impact investment deals that target the highest returns will receive the most capital and the most effective investors in juxtaposition with those with lower returns. Noble describes how philanthropic capital and development is integral, once investors start to realise that targeting social and environmental returns can actually boost and make more long-run, stable, financial returns. For example, when looking at climate change, the Arab Spring, social unrest, youth unemployment or social inclusion, these can all affect the financial market. By the by, the more stability in social or political institutions, the better the business climate. Noble indicates that the “real way” to create a stable market economy would be to focus on social and financial returns in the long-run. GCP and GCP Solar’s basic focus towards Africa and African investments identifies that investments are long-term opportunities as well as a socially responsible and ethical investments.

GCP Solar’s Pilot Project in Tamale, Northern Ghana

In conjunction with Just Shea, GCP Solar distributed 384 solar lanterns to two off-grid lighting communities in Northern Ghana. These are rural areas with no current access to safe light or electricity.

GCP Solar is a distributor of the market leading Nokero® suite of solar products, such as hand-held solar lights and mobile phone chargers. A majority of the population currently use candles or kerosene to produce  light, these can have detrimental affects to their health as well as the environment.

Sidney Yankson (CEO, GCP Solar) ran one-to-one or group sessions teaching the Shea women, with an interpreter, about how to use their purchased solar lanterns. The solar lanterns were a part of their safety kit provided by Just Shea. After returning at nightfall, the feedback was already highly positive. Not only does this provide a safer and sustainable solution to bad lighting, the women actually saved extra money through buying the product. Many of them were pleased that their children could now do their homework after sundown.

The shea women collect shea nuts in remote areas in Northern Ghana. Shea butter is a popular type of moisturiser exported all over the world. 1 million women a year get bitten by snakes when picking the nuts, however now, thanks to their safety kit and solar lanterns, this figure may now be curbed. The Government of Ghana is hoping for 5GW of total power in the country in the years to come. Furthermore, they anticipate that a high proportion of this will come from renewable energy sources.

Bloomberg Philanthropies $5m impact investment into Little Sun, creators of solar-powered lamps

The former New York Mayor, Mike Bloomberg announced Bloomberg Philanthropies would make its first ever impact investment of $US5m into Little Sun, creators of solar lanterns in the off-grid lighting population in Africa. The ‘Little Sun’, is a solar-powered LED lamp developed by Danish artist Olafur Eliasson and created by engineer Frederik Ottesen, it provides safe and affordable light and hopes to replace kerosene as the favoured light source in Sub-Saharan Africa.

The impact investment will be by way of a low interest loan to enable Little Sun to expand its efforts to distribute its portable solar-powered lamps.

The Little Sun is an artistic looking light, the flower-shaped lamp that includes a 6cm by 6cm single cell mono-crystalline solar module, and when utilized in substitution to kerosene lights it also helps keep the environment safer.

Kerosene is not only expensive, costing about 20% of the average person’s income to maintain, but also demonstrated to have highly negative affects to users health and the environment. Incidentally, inhaling four hours worth of kerosene fumes is equivalent to smoking forty cigarettes.

The Little Sun lamp is currently available to be purchased in Uganda, Kenya, Burundi, Nigeria, Ethiopia, Senegal, South Africa and Zimbabwe. 

Bloomberg Philanthropies’ mission is to ensure better, longer lives for the greatest number of people. The organization focuses on five key areas for creating lasting change: Public Health, Environment, Education, Government Innovation and the Arts. Bloomberg Philanthropies encompasses all of Michael R. Bloomberg’s charitable activities, including his foundation and his personal giving.

To read more about little sun please press here, or Bloomberg Philanthropies press here.

KKR to invest $US200m in Ethiopian rose business

Kohlberg Kravis Roberts (KKR) is the latest large firm to recently announce a sizeable investment into an African enterprise, Afriflora, a rose business based in Ethiopia. The $US200m investment marks the private equity firms first ever deal on the continent.

The macro story behind Africa is certainly an appealing one; the current milieu is likely to see dramatic growth over the next decade. Moreover, it appears now to be uncommon to encounter a private equity LP that hasn’t contemplated a new Africa fund, there is definite scope for potential high growth on returns.

However, Swiss asset manager and academic, Cyril Demaria, argues that there is no indication that LPs can earn the sort of upside most of them anticipate from African markets. Demaria denotes how there are gross overestimations of returns; similarly Goldmans Sachs warns investors ought to be conscious of the possibility for underperformance in the market.

Ultimately, some may argue that those who invest in African enterprises need to reconsider the inherent risks of the markets and lower their return expectations. However, a focus on returns alone and their latent capacity for volatility and the unknown does not depict the GCP story. GCP and GCP Solar’s basic focus towards Africa and African investment identifies that investments are long-term opportunities, with the early move advantage as well as a socially responsible and ethical investment.

For more information about Afriflora please press here.

Solar vs. Coal? Solar’s the shining winner. Coal has burnt out…

It has been predicted by 2018, solar could be the most economically feasible source to power big cities. By 2040, +50% of all electricity may be produced in the same place it’s used.

In Queensland last week, for the first time ever, the wholesale price of electricity plummeted into negative territory by the mid-afternoon. Normally at this time, prices are around $NZ40-$50 a megawatt hour, however this figure remained at the value of $0. Prices stayed deflated throughout the week, rooftop solar is believed to be responsible for this. Rooftop solar is one of the newest and biggest power stations in the country. The recent influx of rooftop solar is having grave affects on wholesale prices of power.

Coal will never be free, rooftop solar has been labelled as the democratisation of energy. The next move would be for households and businesses to completely disassociate from the grid, this is a terrifying prospect for coal generators. It is unclear how centralised, fossil-fuel generation, can adapt in an energy democracy.

GCP Solar recognises that West Africa benefits from high levels of solar irradiation. Currently the distribution of handheld solar lanterns is underway in rural villages in Northern Ghana, the GCP Solar team comments that the impacts already seem highly positive. These rooftop solar systems, set to be distributed by GCP Solar,  will provide significant benefits to the users, such as flexible financing to their customers and reliable and clean technology. This coming September, Sidney Yankson (CEO) will be speaking at the West Africa Conference in Ghana. He will discuss the possibilities for renewable technologies in the sub-region encouraging growth and development and a brighter future for Africa.

For the full Guardian Article press here.

U.S set to invest up to US$498 Million in Ghana’s Electricity Network

Bloomberg announced on 4 August that the U.S is set to invest as much as $498.2 million, over an initial five year period, to improve Ghana’s electricity network. This is part of an effort to encourage private investment and help the West African nation become a regional energy hub.

The Millennium Challenge Corporation is an independent U.S agency focusing on foreign aid, it will provide $308.2 million to enhance generators and power lines in the region. If certain targets are met in Ghana, a further $190 million will be made available, which the government corporation didn’t specify.

Ghana’s President John Dramani Mahama described how “energy is increasingly becoming a constraint to growth in Africa”. He is currently attending the U.S. Chamber of Commerce in Washington. Fifty African leaders have been invited to the White House by Barack Obama to discuss investing into the Sub-Saharan continent. The U.S.-Africa Leaders Summit hopes to unlock opportunities, stimulate growth and create an enabling environment for the next generation in Africa.

Ghana plans to invest $37.4 million of its own fund in the power initiative, which Millennium Challenge said will help generate more than $4 billion in the nations energy sector. These ideals embody the mission of GCP Solar, to help spread sustainable energies and provide energy security to those at the base of the pyramid. Through establishing investments in the energy sector this will hopefully nudge African governments in other areas such as human rights, such as girls, women and gays establishing good governance. Similarly GCP Solar hopes having access to safe lighting will help businesses prosper and enable personal development.

For the full article please press here

Standard Chartered invests US$50 million into Botswana FMCG company

Standard Chartered Private Equity (SCPE) has acquired 13% of Botswana-based consumer goods retailer Choppies Enterprises – through a Private Investment in Public Equity (PIPE) deal.

The deal value has not been disclosed but is estimated at about $50million – and is understood to be  Botswana’s largest private equity transaction, historically.

The deal closed at the end of 2013, and was sourced proprietorially – with Choppies being a client of Standard Chartered Bank. Choppies is listed on the Botswana Stock Exchange.

SCPE’s investment will fund the company’s growth plans, which include expanding its foot print across Southern Africa.  Part of the company’s plan is to grow its South African stores to about 80, from the current 23.

The company is working towards having about 40% of its revenues come from South Africa. Sales in South Africa are set to be boosted by a dedicated distribution centre, opened  in 2012.

Choppies has also recently expanded in Zimbabwe – acquiring a chain of 10 stores, and a distribution facility. In Botswana, the company is estimated to hold over 30% share of the retail market in the country’s Fast-Moving Consumer Goods (FMCG) space.

Headquartered in Gaborone, Choppies retails FMCG products through more than 100 stores across Botswana, Zimbabwe and South Africa. The company was founded in 1986 and employs more than 10,000 people

Choppies reported profits before tax of approximately $23million (P198million) for the full year up to June 2013, a 27% year-on-year growth. Its revenue for 2013 stood at about $471million, growing about 22% from 2012.

China and Japan pledge more money for African investments

China and Japan pledging more money for the African continent.

Japan’s leader Shinzo Abe is expected to pledge more than $14bn in aid and trade deals during his trip to Ethiopia, Ivory Coast and Mozambique.

China has hailed Africa a “golden ground” for foreign investment and has pledged to double its aid to the continent to $20bn a year.

Mr Abe’s spokesman Tomohiko Taniguchi admits Japan is lagging behind China in terms of investment in Africa.

Mr Taniguchi said: “Japan’s aid policy is to really aid the human capital of Africa.” He said many African leaders believed that through strong links with Japan they could obtain industrial expertise and know-how.

China insists its aid and co-operation with Africa are completely selfless.

 

Should investors head to Africa or Asia in the hunt for returns?

Sub-Saharan Africa is set to grow at around 6 per cent a year, faster than India. Asia, excluding Japan, is projected to grow at 7 per cent, but these rates are regularly revised down.

Fifteen of the world’s 29 fastest growing economies in the world are in Africa.

Africa is now where the Brics were a decade ago, signalling huge growth potential.

Ten of Africa’s 54 countries have a GDP per capita greater than China, while 17 are greater than India.

Africa is at an earlier stage of its development than Asia. As Asia shows, returns come in the early years. £1000 (€1193) invested in Asia in 1988 was worth £4016 five years later – equivalent to 27 per cent annualised growth. The same sum invested in 2008 is worth just £1517 today – a more pedestrian 7.5 per cent.

Africa’s growth today is investment-led, not sparked by a surge in mineral prices, as happened in the 1970s. Foreign direct investment into Africa increased fivefold since 2000 and 5 per cent in the last year. Growth includes countries like Ethiopia which do not have significant mineral wealth. Rwanda, without natural resources, has been able to sustain a growth rate of 8 per cent thanks to sensible economics. Africa’s resource-rich states are better managing their wealth: Botswana used its diamond wealth to develop quickly, growing from one of Africa’s poorest countries at independence in 1966 to become a democratic, stable, and upper middle-income country.

Africa’s total stockmarket capitalisation grew from $245bn (€180bn) in 2002 to more than $1tn in 2010. According to African economic expert Paul Collier, returns on investment in Africa are higher than in other regions: the average return on capital for companies was two-thirds higher than that of comparable companies in China, India, Indonesia, and Vietnam.

Africa has a median age of 20 years compared to 30 in Asia, and the number of working age people will double to 1.1bn by 2040. With rising costs, Asia is no longer the low-wage factory of the world. And entrepreneurial Africans are returning to establish businesses on the continent. Africa has more cities of over 1m population than Europe and has more $20,000+ earners than India. All this is powering consumer facing service sectors, sectors where growth is not correlated with the rest of the world – a tempting combination.

Agriculture is a key sector for growth. Africa has 60 per cent of the world’s uncultivated arable land. Food distribution is improving as transport infrastructure develops and agricultural policies improve. The agriculture sector can diversify into processing. Africa is a big exporter of raw agricultural products.

With its richness of resources, young and growing populations and a greater commitment to political and economic reforms, it would be a brave and likely foolhardy choice to ignore the growth potential of Africa in the decade ahead.

Africa Renewable Energy Fund gets US$ 65 million equity package

The Board of Directors of the African Development Bank (AfDB) approved on Wednesday, November 13, a US $65-million equity investment package in the Africa Renewable Energy Fund (AREF) comprised of US $25 million from its statutory resources, US $35 million from the Sustainable Energy Fund for Africa (SEFA) and US $4.5 million from theGlobal Environment Facility (GEF). AREF is a private equity fund that will invest in small- to medium-sized renewable energy projects in Sub-Saharan Africa (SSA), excluding South Africa, with a targeted fund size of US $150 million to $200 million.

The resources needed for Africa to adapt to climate change and embark on low-carbon growth paths are estimated to range from US $22 billion and US $31 billion per annum between now and 2015. However, few pan-African infrastructure funds have scope to make clean technology investments, whereas there is a dearth of funds that are dedicated to renewable energy investment or that have an investment focus targeting SSA.

AREF will have a significant impact in facilitating greater private capital inflows into clean energy technology industries across Africa, while lowering greenhouse gas emissions currently associated with the energy sector. By investing in clean technology solutions, AREF will assist Governments in meeting their renewable energy (RE) and carbon emission targets, while contributing to job creation, income generation, increased delivery of services and Government revenues.

AREF has been set up to contribute to the investment needs and, through the demonstration effect, catalyze the additional investment required to build sustainable RE industries across SSA. The AfDB played a key role as the lead in the fund’s conceptual development, including the structuring of the fund and selection of the fund manager. AfDB and SEFA are co-sponsors and anchor investors in the fund each bringing a US $25 million equity participation. SEFA will additionally provide US $10 million to AREF’s Project Support Facility (PSF) to prepare and structure bankable projects. Lastly, the Global Environment Facility (GEF) will invest US $4.5 million in equity from an AfDB-managed public-private partnership platform program.

Berkeley Energy LLP (BE), AREF’s manager, established in 2007, raised a US $110 million Renewable Energy Asia Fund (REAF) in 2009 and deployed 80% of its capital within three and a half years. The REAF investment remit is substantially similar to AREF, with the BE team demonstrating over 60 years of relevant project development experience in emerging markets, including experience within the team of delivering operating energy assets in Africa.

The AREF mandate, aligned with the AfDB’s Ten-Year Strategy for 2013-2022, is focusing on energy security and inclusive green growth as the pathway to sustainable development and creating broad-based prosperity. The fund is also well aligned with the Bank’s Energy Policy, the Banks’ Clean Energy Investment Framework and Climate Change Action Plan, which aim to help its member countries to transition to a cleaner energy mix and support investments to reduce Africa’s vulnerability to climate change.