In 2016, the Catalyst MENA Clean Energy Fund (CMCF) was launched with a focus on renewable infrastructure.
CMCF is the second fund launched through the Catalyst Private Equity platform. CMCF will continue to focus on backing solar PV projects in the MENA region, with a primary focus on Jordan. It will also evaluate investments in SMEs serving clean energy, energy efficiency and water markets within the broader MENA region and internationally. In its First Close CMCF secured USD 47.7 million of commitments from blue chip international investors and is targeting USD 100 million for a Final Close in H2 2017. So far, CMCF has already secured three solar PV projects (of which the first if now operating), committing a minimum of USD 13 million for its equity stake in a total of 71 MW of capacity, with USD-based “take or pay” agreements in place.
CMCF builds on the ten (10) year experience in the renewable energy and energy efficiency sectors in the MENA region, and has already secured the first three (3) solar PV power project investments, totaling over 70MWp.
CMCF combines high investor returns with strong risk mitigations. High returns are due to the combination of project development with investment. Risk mitigations relate to both the nature of the investments, commercially viable and proven infrastructure (primarily solar power) with bankable take or pay agreements, in stable countries like Jordan, with political risk insurance used where necessary.
Over the next 25 years, the MENA region will invest USD 189 billion into 224 GW of utility scale solar PV. The region also has huge growth potential for SMEs that serve renewable energy, efficiency and desalination sectors. Low risk countries such as Jordan offer bankable agreements for solar projects with non-recourse financing, overlaid with sovereign guarantees, political risk insurance, currency hedging and other mitigants while returns are attractive.
Based in Jordan since 2006, Catalyst Investment Management (CIM) is the first MENA region fund manager specializing in renewable energy and efficiency and one of a very limited number of players with a track record of investment in solar PV. CIM has built extensive networks for proprietary deal origination and co-investment, a deep pipeline of projects, strong global strategic relationships, a multidisciplinary and complementary team and demonstrated the ability to raise capital and take projects from concept to revenue generation.
CMCF will deploy most its capital into high quality solar PV projects in Jordan, which offers multiple incentives and support mechanisms such as tax breaks, sovereign guarantees, grid connection costs and USD indexation for up to 100% of the tariff. Egypt, Morocco and Tunisia are also within scope and projects will be evaluated opportunistically. Catalyst will have the option to invest up to 33% of the Fund in growth capital opportunities with SMEs focused on clean energy, energy efficiency and water within these four countries that address broader MENA and international markets.
CMCF has been partly financed with the financial assistance of the European Union. The views expressed therein can in no way be taken to reflect the official opinion of the European Union.