Africa GreenCo aims to promote large-scale renewable energy development across Sub-Saharan Africa through establishing an independent power offtaker and trader. It would act as a single counterparty for power purchase agreements with generators, taking payment risk from national utilities. This would streamline project development, mitigate risks for private investors, and catalyze investment in cross-border renewable projects. Africa GreenCo's establishment would require substantial funding commitments from development finance institutions, donors, and multilateral development banks to become financially sustainable over the long term.

1. Africa GreenCo(Africa Green Regional Energy: Efficient, New and Creditworthy Offtaker
Copyright © 2010 by Africa GreenCo.
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at the address below.
Ana Hajduka
Africa GreenCo Founder & CEO
Email: ana.hajduka@africagreenco.com
Mob: +447789204363
Abidjan, PIDA Week November 2015

2. Mission
Benefit
Sectors
Africa GreenCo’s mission is to promote the development of a public-private partnership in the form of an
independent, creditworthy, renewable energy offtaker/trader of power, acting at a regional level in
Sub-Saharan Africa to purchase electricity from Independent Power Producers (IPPs) and sell via the power
pools. From a financial stand-point, it will use its capital base to enhance off-taker creditworthiness. From
an operations stand-point, it will coordinate government decision making, facilitate interconnection and
increase power trading.
Regional and interregional power sector integration is a prerequisite for larger and more cost-effective hydro-
electric, geothermal, wind, solar and biomass projects, and will savebillions of dollars in development, opera-
tion and maintnance costs, enabling the expansionof energy access in Sub-Saharan Africa.This single-point
power purchase agreement (PPA) counterparty would streamline development, mitigate offtake and credit
risk,and catalyze private sector finance for large scale cross border renewable energy development.
Renewable and sustainable energy

3. Feasibility study
Current status
Grant funding provided by the Rockefeller Foundation .
Funded By
SE4AAll Finance Committee Report, which was presented at the Financing for Development Conference in Addis to Africa’s Heads of
State, endorsed Africa Green Coas a recommendation and a call to look into the concept’s viability
Endorsed By
Ben Kioko – Former Chief Legal Advisor to the African Union
Tim Nielander – Senior Legal Advisor for ARC and rom 2005 until 2010, Tim served as
General Counsel and Managing Director of Corporate Services for theGAVI Alliance
Tantra Thakur – Former Founder and Managing Director of PTC India
Special Advisors:
SE4AAll Finance Committee Report, which was presented at the Financing for Development Conference in Addis to
Africa’s Heads of State, endorsed Africa Green Coas a recommendation and a call to look into the concept’s
viability
Financial Advisors
Lion’s Head Global Partners.
Project Development & Finance: Shearman & Sterling has one of the leading international legal practices in limited
recourse development and acquisition financing of projects
Legal Advisors
Shearman & Sterling LLP
Working with

4. Current Situation
Correlation between infrastructure development and GDP grow What is needed is an “integrated infrastructure” approach (focus on genera-
tion and transmission and interconnection) Current focus on individual projects in different countries – unconnected projects Efficient cross
border power integration is vital for economic developed
(Source: McKinsey’s Brighter Africa Report)
Only 37% of the eastern African and 25% of the southern
African population had access to electricity in 2010
Sub-Saharan Africa by 2040
Huge demand that needs to be tackled in an integrated
manner:
1 Fourfold increase in total demand - nearly 1,6000 terawatts
of consumption by 2040
2 Fivefold increase in GDP
3 A doubling of population
4 Increased urabanization (70%) – with more than 70% of
population grid connected
Context – Regional Renewable Energy Development
25%37%
70%

5. (Source: McKinsey’s Brighter Africa Report)
Supply
1 Excluding solar, 1.2 terawatts of capacity
2 Including solar 10 terawats of capacity
3 400 of gas generated power – (Mozambique, Nigeria and Tanzania representing 60%)
4 350 gigawatts of hydro (with DRC representing 50%)
5 109 gigawatts of wind
6 15 gigawatts of proven geothermal (Ethiopia and Kenya)
Capital Required by 2040
1 More than 800$ billion in capital needed (490$ for new generating capacity
and $35 for transmission and distribution)
2 $40 billion in capital savings with regionalization and save African consumer
$10 billion per year by 2014 with the fall of the levalized cost of energy
3 Increased adoption = 27% reduction in C02

6. Positive Developments for regional energy development
1 PIDA Financial Structuring Plan calls for new models of partnership between business,
government and donors to implement the 51 Priority Action Plan (PAP)
2 The energy component in the PAP alone consists of 15 projects worth US$ 40 billion
3 SDG’s adopted and SDG 7 calls for doubling of clean energy
4 SE4ALL calls for doubling of renewable energy generation
5 Africa 50 as a source of project development and project finance
6 AfDB’s New Deal for Energy in Africa and “Integrated Infrastructure” approach
7 Arica Power Vision – A regional approach supported by AU and NEPAD

7. Main Problem – Attracting Sufficient Finance for Regional projects due to:
Solution – Africa GreenCo
• The lack of creditworthiness of off takers;
• The lack of supply and size of high quality bankable deals;
• The lack of necessary expertise and knowledge in developing IPPs.
• Africa GreenCo – a new model via which to achieve PIDA’s regional energy ambitions
• Follows NEPADs project selection methodology as per Africa Power Vision
• Follows PIDA’s Financial Structuring Plan
• Follows SAPPs Priority Projects Methodology for Project Selection
• Aligns its goals with that of Africa 50 and AfDB’s New Deal for Energy in Africa
• Africa GreenCo not another risk mitigating instrument but 1)an offtaker and 2) a trader
Unlike current development efforts which focus on the financing component of both large-scale and off-grid
generation, this mechanism addresses the core issue of creditworthiness of off-takers and the lack of a viable power
market to sell electricity production.
The envisioned entity is an ambitious attempt to develop the largely underutilized power pools by providing them
with the first ever independent power broker capable of developing fair and standardized electricity markets.
Africa GreenCo is not an another initiative – it is a business and a new vehicle
An integrated solution – not an additional financial instrument

8. What is Africa GreenCo
Intermediary &
Creditworthy Regional
Offtaker
Power Trader via a
power pool
AND

9. What will Africa GreenCo do?
It would act as a credit enhancement intermediary for regional power projects by
entering into long term power purchase agreements (PPAs) with generators and back-
to-back PPAs with state utilities, thus standing between IPPs on the one hand, and the
utility companies to which they currently sell on the other.
It would sell via the power pools thus involving the power pools as a key counterparty
It would be a single point PPA counterparty, eliminating the need for power producers
to negotiate multiple PPAs and associated support packages
In case of national utility default it would sell to another wiling buyer via the pool –
diversifying the risk amongst multiple players
Africa GreenCo pools default risks – aim is to achieve scale and diversification across a
number of off-takers. Its credit criteria will also have to take into account a target
portfolio risk and the trade-offs between low rated and higher rated African countries.
Africa GreenCo would act as intermediary offtaker only and would not manage the actual transmission and
distribution of energy. It would not own any of the grid infrastructure or seek to replace existing utilities or the
role of the power pools – it would become a new member of the power pool in its role as an offtaker and
trader via it.
1
2
3
4
5

10. Transactional Structure Schematic
MIGA/
World Bank
or Climate Funds
Guarantee
SAAP Member
States
Commercial end user Private end user
MDB,DFls
Donors,
Private sector,
and national
utilities
Banks and debt
providers
Equity
Contribution
Equity Contribution
Equity
Contribution
5-10%
Equity
return
Equity return
Debt
Finance
Debt
Repayment IPP
Equity
return
Equity investors
National utility
companies
SAPP
Africa
GreenCo
Indemnity
Guarantee
Member State
Guarantee S MWh
MWh
MW
MW
MWh
PSA S
PPA S
Plus margin

11. Next Steps
1. Establish regional focus and prove pipeline of projects. Current focus on SADC/SAPP because:
• SAPP the most sophisticated power pool to date;
• SADC/SAPP working on the establishment of the SADC wide IPP framework;
• Membership open to private-public sector entities. Private company CEC already a member;
• RURA established a uniform wheeling tariff methodology.
2. Prepare a credible financial structure for the vehicle
3. Prepare a credible legal and regulatory structure – learning from the example of ARC and ATI
4. Take into account all main technical (transmission, interconnection, power trading) and other
relevant requirements in order to indicate the technical feasibility of the concept
The concept could also be contextualized for:
1. Great Rift Valley Geothermal Projects
2.Mano River Union area generation projects to connect to the CGTL transmission line
3.EAPP and EAC
4.The Great Lakes Region

12. Modelling the Instrument: Overview
Africa GreenCo’s core operational model is as a power trading intermediary between devlopres and offtakers
and offtaker.Our financial analysis aims to factor in indirect implications on investment and pricing
across the energy supply chain significantly enhance the
African power ecosystem.
Investors
IMPACT
MODELLING
FACTORS
Capital
Increased bankability
Lower risks
premiums
Optimizing capital
structure
IRR and NPV
PPA cost Impacts
Cost of capital
impacts
Margin on PPA pass
through
Default Risk
management
Other return options
(CO2, IPP stake)
Reduced balance
sheet pressure
Improved cross
border coordination
Impact on cost of
electricity
Lower transaction
costs
Power
Projects
AFRICA
GREENCO
Utilities End UsersPPA
Increased bankability
Lower offtake price
Pooled default risk
Reduced contracting
time, complexity
Lower in cost of
capital
Improved source
planning
Time to contract
Lower cost electricity
Increased availability
of electricity
PPA Power

13. Modelling the Structure : Cont'd
Determing the ultimate capital structure for Africa GreenCo is will be dynamic,
encompassing various considerations on the optimal strategy, scope of activities
legal structure and regulatory framework.
Investors Capital Power
Projects
AFRICA
GREENCO
Utilities End UsersPPA PPA Power
• Margin on PPA pass-through
• Management team
• Transaction costs
• Project Pipeline
• Balance sheet
• Tranching
• Liquidity
• Leverage/ratings
• Type of Investor
• Return of cashflows
• Long term financial
• Sustainability
• Credit enhancement
• Cost of management and operations
• Portfolio characteristics
• Return expectations
• Risk appetite
• Macro market conditions
OPERATIONS
CAPITAL
STRUCTURE
INVESTORS

14. Investor Base: Considerations
Africa GreenCo presents timely innovative financing opportunity – pooling capital from a board
range of types of investors according to the quantum of capital needed, market demand and
relative risk/return profile
CONCESSIONAL International
Donors
• Catalytic Capital
• Host/partner organisation(s)
• Non financial impacts numerous,
• Health, education, trade
• Local ownership
• Risk sharing
• Scalability/Marketing Depending
• Long term financial sustainability
• Improved risk/ Price discovery
• Direct assest class exposure
Philanthropic
Investors
African Public
Sector
African Private
Sector
International
Capital MarketsCOMMERCIAL

15. Evolving The Structure And Investor Base
The capital structure of Africa GreenCo will evolve over time. Initially, we expect to access
funding from concessional capital and coordinate – financially and operationally – with
IFIs. Longer term, the aim is to create a financially viable investment platform.
STAGE 1: PILOT
LEVERAGE
LEVERAGE
Rating
Structuring
MDBs/DFIs
International Capital Markets
Insurance and Re-insurance
African public sector
African institutional investors
Int’l institutional investors
Int’l Donors
Foundations
Member State’s
IDA as per ATI
Host/partner organisations
Initial deal flow
Proof of concept
Tranched Capital Structure
Visible deal Pipeline
Financial sustainability
CAPITAL
CAPITAL
STAGE 2: GROWTH

16. Product: Africa GreenCo will offer a PPA with a back-to-back power supply agreement with national utilities.
Pricing: Africa GreenCo is offering guaranteed payment to IPPs and taking the risk that it will receive payment from national utilities and
governments (diversifying the risk by being able to sell to other members of the pool via SAPP and/or EAPP, including having the ability to
divert power in case of default).
Tariff: The tariff charged by AGC to utilities must not be greater than the cost of direct contracting. The intentionis that the generation tariff
offered by the IPPs to AGC will be lower as a result of enhanced credit strength of its counterparty (i.e. a lower cost of capital through cost of
debt, tenor, leverage and LOC/ reserve requirements(and reduced delay) and this will enable a lower tariff to be offered to utilities than is
currently achieved, even
after AGC’s costs have been factored in.
Portfolio: The crucial aim for AGC is to achieve scale and diversification across a number of off-takers. Its credit criteria will also have to take
into account a target portfolio risk and the trade-offs between low rated and higher rated African countries.
Capital: The efficient capital structure for AGC will depend on its risk weighted portfolio and capital requirements. Different capital sources might be
incorporated in a tranched structure (first-loss, second-loss, etc.) with different sources (e.g. donors, DFIs and other investors) plus member states
contributions (either through equity capital (from IDA via World Bank) similar to the arrangement for ATI, or long-term subordinated loan, or non-vot-
ing subordinated equity if allowed by national laws). We will also need clear rules for the portfolio risk management.
Leverage: Initially, we accept that achieving leverage thorough commercial counterparties will be difficult, so we may look to the likes of EIB, KfW,
WBG and AFDB to provide AAA counter guarantees.
FX: Depending on the outcome of the analysis of Strategic Options, AGC may have a local currency component. The management of FX risk, or the
mitigation of FX risk, will be a primary concern if offering part-local currency PPAs. Management: AGC will require experienced professional staff with
experience in credit underwriting, insurance markets, power trading and project finance.
Legal and Regulatory - We are looking at ATI and ARC as examples of public-private intergovernmental entities and risk pool vehicles. Also we are
looking at inclusion precedent of CEC as a first private sector member of the SAPP.

17. Benefits of Africa GreenCo (amongst others):
• Local ownership by structuring the vehicle as a public private partnership with African sovereigns as
members (similar to African Risk Capacity and African Trade and Insurance Agency);
• Standardization of power contracts and terms;
• Support for the further development of existing power pools as regional power system operators;
• Ultimately takes away the need for sovereign guarantees as member states are pooling risk and
capital at the Africa GreenCo level;
• Opportunities to facilitate restructuring of existing project debt, making it easier for DFIs to sell post-
construction portfolios to institutional investors;
• Reduced power prices by minimizing risk premiums applied to investors and introducing more competition;
• Africa GreenCo provides a central vehicle through which organisational and practical challenges can be
approached and resolved

18. • Clear member states’ political approval to be obtained;
• Substantial funding and interest required from DFIs, donors and MDBs;
• Underdeveloped transmission and interconnection networks and tie lines;
• Lack of sophisticated legal framework for trading;
• Lack of clear wheeling rules and rules for access to the transmission grid;
• Difficulty aligning national and regional investment decisions;
• Differences in regulatory environments between countries; Insufficient regional institutions with
independent regulatory powers;
• Slow progress towards achievement of cost reflective tariffs; and
• Challenges of ownership and accountability for regional programs.
Main Barriers to Implementation

19. Africa is on the Move
Today
Collective
GDP in 2013
US$2.0 trillion
1.1billion
38%
US$1tr
US$5.5 trillion
2.4 billion
60%
US$ 4.75tr
Africa’s
Population
2013
Population
in Urban
Areas 2013
Consumer
Spending 2013
Collective
GDP in 2050
Africa’s
Population
2050
Population
In Urban
Areas 2050
Consumer
Spending 2050
Tomorrow
Emerging as an Economic Success Story