ARM-Harith Infrastructure Fund will boost investment in the electricity sector in Nigeria following the launch of AD Power HoldCo, which aims at investing in renewable energy equity financing.
With a focus on off-grid and interconnected mini-grids as well as captive commercial projects sized at less than 1MW in Nigeria, the firm would invest equity and quasi-equity instruments into companies holding projects with small to medium-sized renewable energy off-grid projects, interconnected mini-grids and commercial and industrial projects.
The new platform would also mobilise affordable, long-term, local currency debt financing via an investable balance sheet to enable the delivery of commercial debt and debt capital from domestic financial institutions.
The firm, disclosed a release that the ADP platform has commenced investments with allocations of up to $7 million in two separate SPVs developed by two off-grid developers. Each SPV comprises multiple off-grid projects in Nigeria and will create the foundational investments to scale additional investments in projects and SPVs by multiple developers.
The two companies currently serving as recipients of the foundational investments by ADP are Energy Conversion Company Nigeria (ENERCON) in partnership with sponsor, Nayo Tropical Technology, and GVE AssetCo Nigeria Limited (GANL) in partnership with sponsor, Green Village Electricity Projects Limited (GVE).
ARM-Harith’s role in the project included creating the investment structure of a consolidated HoldCo targeted at combating the challenges of small project sizes and fragmented investment space and offering a streamlined transaction process, reducing overall transaction
costs.
The release noted that the firm would take advantage of a positive regulatory environment for investments in distributed energy projects for communities to enhance access and supply of electricity.
It also consolidates best practice and technology systems to scale distributed energy solutions at a rapid pace.
Speaking on the investment, Chief Executive Officer, ARM-Harith Infrastructure Investments Ltd, Tariye Gbadegesin, said it is in line with ARM-Harith’s mission to invest in sustainable infrastructure projects that support economic growth and development in Nigeria.