Mainstream to receive €89m for minority stake in African joint venture

Dublin-based Mainstream Renewable Power and UK private-equity firm Actis have agreed to sell Lekela Power, the African wind energy joint venture they set up seven years ago, in a deal that will generate a net $90 million (€88.8 million) for the Irish firm’s remaining 15.5 per cent stake.

The enterprise value of the sale to Egyptian renewable energy group Infinity and Africa Finance Corporation, including equity and debt, amounts to $1.5 billion.

Established in 2015, Lekela, a play on le chéile, the Irish for together, has become Africa’s largest pure-play independent renewable-energy producer with 1,000 megawatts (MW) of fully operational wind assets across South Africa, Egypt and Senegal. It also has development opportunities in Ghana, Senegal and Egypt.

Actis retained a 60 per cent stake throughout the lifespan of the joint venture, while Mainstream’s holding fell from 40 per cent to 15.5 per cent in 2016 as it brought in a group of co-investors, including the Rockefeller Brothers Fund and the International Finance Corporation, a member of the World Bank. A spokesman for Mainstream declined to comment on the company’s financial investment in Lekela over the past seven years.

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Meanwhile, Mainstream, which was founded in 2008 by Irish renewable-energy entrepreneur Eddie O’Connor, was taken control of by Norway’s Aker Horizons early last year in a deal that valued that business at up to €1 billion.

That agreement allowed Mr O’Connor and a group of long-standing Irish high-net-worth investors to reinvest some of the proceeds to retain a 25 per cent stake in the business.

The legacy Irish investors’ stake is on track to be diluted to 16.5 per cent as the result of Mainstream’s recent sourcing of new investment from Japan’s Mitsui as well as a plan by Aker Horizons to merge Mainstream with another company in its portfolio, Aker Offshore Wind.

The ultimate goal is to float Mainstream, led by chief executive Mary Quaney, on the stock market in the coming years.

“There has never been a more critical time to accelerate the global transition to renewable energy, for the health of both our planet and our communities,” said Ms Quaney.

“Much of Africa is acutely vulnerable to climate change and we are proud to have worked with Actis, as well as the communities, governments, project lenders, equipment suppliers and contractors across Africa, to deliver over one [gigawatt\ of operational wind power that will continue to have a positive impact for decades to come.”

In June, Mainstream and Actis announced the completion of the sale of its Chilean joint venture, Aela Energía, to the Canadian-listed developer Innergex Renewable Energy.

The Lekela deal is expected to close later this year, subject to various regulatory approvals.