• Tuesday, April 23, 2024
businessday logo

BusinessDay

Konexa gets $18m for Nigerian energy trading platform

Konexa gets $18m for Nigerian energy trading platform

Climate-centric blended finance fund manager, Climate Fund Managers (CFM), and Microsoft’s Climate Innovation have invested $18 million in Konexa, a UK-based integrated energy development and investment platform, to launch its landmark private renewable electricity trading platform.

The companies announced this in a joint statement released on Monday.

Konexa expects the trading platform to link its first client, Nigeria Breweries PLC, to the grid with 100% green energy supply for two of its breweries (the “Project”).

According to the statement, the project will establish the trading platform and facilitate the transmission of renewable energy from the 30MW Gurara Hydro Power Plant in Kaduna State, Northern Nigeria, to two Nigerian Breweries’ Kaduna facilities.

The statement said, “Currently off-grid and powered by fossil fuels, both breweries will

transition to receiving 100% 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 to connect Nigerian Breweries PLC to the grid supplied by renewable energy from the Gurara Plant. With an annual supply of 20.5GWh, the Project will avoid 8,104 tons of CO2 equivalent emissions per year, the equivalent of taking 1,800 cars off the road,” it added.

Through its Climate Investor One (CIO) fund, an EU-sponsored blended finance facility centred on renewable energy infrastructure in developing nations, CFM invested in the Project.

“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 for the Project. CFM supported the technical, financial and ESG aspects of the project development, helping the Project achieve financial close within just 14 months,” the statement said.

Pradeep Pursnani, chief executive officer of Konexa, 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”.

Darron Johnson, regional head of investments Africa at CFM, said Nigeria has suffered from under-investment in its grid infrastructure, particularly with the distribution grid.

He said, “Konexa’s trading platform will play a pivotal role in bridging this gap by efficiently connecting third party, and, in future, its 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.”

Brandon Middaugh, senior director of the Climate Innovation Fund at Microsoft, said, “At Microsoft, our long-term vision is to reach a state where, on all the world’s grids, 100 percent of our electricity, 100 percent of the time, is generated from zero-carbon sources and that clean power can reliably reach all customers”.

“With this investment, Konexa’s technology will deliver firm, clean power to customers in sub-Saharan Africa, demonstrating the impact of innovation and grid modernization”.

Konexa is one of the few companies to be awarded a private energy trading license in Nigeria. Nigerian Energy Regulatory Commission awarded the license in June 2022 which allows Konexa to source renewable power from IPPs, transport it across the national grid and sell it to private clients at a competitive price.

Transactions will be facilitated via 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.