Abraaj Boss speaks on decision to invest in Africa's energy infrastructure

Growth market investor Abraaj has made a strategic decision to invest in Africa's energy infrastructure, where the demand for power has been on the rise due to demographic changes and urbanization. In a recent interview with CNBC Africa, Sev Vettivetpillai, Managing Partner, Executive Board Member at Abraaj Group & Global Head of Thematic Fund Businesses, shed light on the reasons behind Abraaj's venture into the energy sector in Africa. Vettivetpillai highlighted the historical lack of government investment in the energy sector, coupled with regulatory policy changes to attract private sector capital, as key drivers for increased demand for power in the region. However, he pointed out that a significant challenge remains in the form of a shortage of high-quality, bankable energy projects due to a lack of experienced developers in the market. To address this issue, Abraaj has acquired Teamys Energy, an African home bank infrastructure team, to bolster its in-house development capabilities and facilitate successful investments in the sector. By co-developing projects with local partners, such as a 44-megawatt hydro plant in Cote d'Ivoire and a 100-megawatt solar project in Rwanda, Abraaj aims to provide sustainable power solutions for the region. Furthermore, the company has made a strategic decision to focus on clean energy, including combined cycle gas, to ensure a reliable power supply for the next few decades. Vettivetpillai emphasized the importance of negotiating long-term contracts and possessing the necessary expertise to navigate the complexities of energy projects in Africa. Abraaj's commitment to renewable and clean energy projects aligns with its goal of driving positive impact and sustainable development across the continent, while also tapping into a lucrative investment opportunity in the energy sector.