UK-based integrated energy development and investment company, Konexa, has achieved financial close on a combined $18 million investment to establish private renewable electricity trading platform and connect Nigeria Breweries Plc, its first client, to the grid.
The funding for the renewable electricity project, which is supported by climate-centric blended finance fund manager Climate Fund Managers (CFM) and Microsoft’s Climate Innovation Fund, will enable Nigeria Breweries to source 100% green energy for two of its plants in the country.
According to Konexa’s officials, the investment will help to establish the trading platform and facilitate the transmission of renewable energy from the 30 MW Gurara Hydro Power Plant in Kaduna State, Northern Nigeria, to two of Nigerian Breweries’ Kaduna facilities.
Currently off-grid and powered by fossil fuels, both breweries will transition to receiving 100 percent of their electricity needs from the hydro energy source, operated by North South Power Company Limited.
The investment by CFM and Microsoft’s Climate Innovation Fund will support the construction of facilities and the deployment of a Battery Energy Storage Solution (BESS) to connect Nigerian Breweries Plc into the grid supplied by renewable energy from the Gurara Plant.
With an annual supply of 20.5 GWh, the project will displace 8,104 tons of CO2 equivalent emissions per year, the equivalent of taking 1,800 cars off the road.
The CFM invested via its Climate Investor One (CIO) fund; an EU-supported blended finance facility focused on renewable energy infrastructure in emerging markets.
The funding, which was facilitated via CIO’s Construction Equity Fund, was provided by the European Commission. CIO’s Development Fund, in which the European Commission is an investor, provided development funding. CFM supported on the technical, financial and ESG aspects of the project development; helping to achieve financial close within just 14 months.
Speaking on the investment plan, CEO of Konexa, Pradeep Pursnani, said: “We are honoured to have been awarded one of the first trading licenses for renewable energy in Nigeria and to be launching our trading platform with the invaluable support of CFM and Microsoft’s Climate Innovation Fund.
CFM’s expertise in developing, financing and structuring renewable energy infrastructure has been instrumental in shaping the project’s success, and Microsoft’s commitment to innovation aligns seamlessly with our vision. The platform will enable us to integrate sustainable energy sources into the grid while helping decarbonize the hard-to-abate commercial and industrial sector”, Pursnani added
Also commenting on the funding deal, Regional Head of Investments Africa at CFM, Darron Johnson, noted that historically, Nigeria had suffered from under-investment in its grid infrastructure, particularly when it comes to the distribution grid and that Konexa’s coming in would help to change the narrative.
He clarified: “Konexa’s trading platform will play a pivotal role in bridging this gap by efficiently connecting third party, and, in future, its own renewable energy generation to C&I customers, helping them achieve reliable, cost-effective and sustainable energy independence while strengthening and enhancing the sustainability of the national grid.”
It would be recalled that Konexa was one of the few companies that the Federal Government granted private energy trading licences in Nigeria.
The licence, which was awarded by the Nigerian Electricity Regulatory Commission (NERC) in June 2022, allowed the company to source renewable power from IPPs, transport it through the national grid and sell to private clients at a competitive price.
The transactions will be facilitated through a new electricity trading platform, enhancing energy reliability and sustainability for off-takers and contributing to the overall resilience and efficiency of the national grid.
