July 28, 2016 3:14 am
Rockefeller fund backs Africa renewables
Andrew Ward, Energy Editor
The family foundation built on the riches of John D Rockefeller’s Standard Oil has backed a $177.5m wind and solar power programme in Africa, marking its biggest move into green energy since announcing plans to stop investing in fossil fuels.
The Rockefeller Brothers Fund is part of a consortium of investors supporting a scheme led by Mainstream Renewable Power of Ireland to build 1.3 gigawatts of carbon-free generating capacity in Africa by 2018.
The agreement is the clearest sign yet of the fund making good on its 2014 promise to withdraw from fossil fuel investments and reallocate resources to green energy because of concern about climate change.
That decision drew criticism at the time from some in the oil sector who saw it as a betrayal of an industry that formed the basis of Rockefeller wealth. But Stephen Heintz, president of the Rockefeller Brothers Fund, said this week that the switch to renewable energy was in keeping with the family spirit.
He said: “John D Rockefeller was a great visionary who saw in petroleum a product that was going to change the world. If he were alive today he would see that the future is going to be in green power.”
About 3.3 per cent of the $816m fund is still invested in fossil fuel assets — mostly oil and gas companies — but this is down from 7 per cent two years ago and Mr Heintz said these would continue to be sold.
The fund, founded by the sons of Mr Rockefeller in 1940 to promote “a more just, sustainable, and peaceful world”, has committed $10m to the African renewables scheme.
The money will help finance Lekela Power, a joint-venture between Mainstream and Actis, a private equity fund spun out of the UK government in 2004 to invest in the developing world. Lekela is planning wind and solar projects in South Africa, Egypt, Ghana and Senegal.
Mr Heintz said that while there would be environmental and humanitarian benefits from the investment, his fund’s main objective was to make money.
“This is a continent with a huge energy deficit,” he said. “So there is a social impulse [to invest] but it is also an extraordinary opportunity for Africa to leapfrog the old energy systems of the past to the new green energy systems of the future.”
The Rockefeller-backed consortium will contribute $117.5m to the fundraising, with a further $60m coming from Mainstream. Other investors include the International Finance Corporation, the World Bank’s private lending arm.
If [Rockefeller] were alive today he would see that the future is going to be in green power
- Stephen Heintz, president of the Rockefeller Brothers Fund
Mainstream has been operating in Africa since 2009 and says it is playing an important role in the delivery of US President Barack Obama’s “Power Africa” plan to add 30,000 megawatts of electricity capacity to the continent by 2030.
Eddie O’Connor, the co-founder and chief executive of Mainstream, said the falling cost of wind and solar power meant these were increasingly the most affordable options for expanding access to electricity in Africa.
“Wind power is about 50 per cent cheaper than new coal capacity in South Africa,” he said. “It’s not only the righteous thing to do from an environmental standpoint but it’s also sensible economically.”
According to the International Energy Agency, 635m people in Africa — more than half the population — did not have access to electricity in 2013.