Lisa Pinsley, partner, head of Middle East & Africa energy infrastructure, Actis, explores how the continent can attract more investment to help develop critical infrastructure
African Review: Which African sectors typically attract the most investment and how will this change in the coming years?
Lisa Pinsely: Actis continues to believe in the opportunity to supply critical infrastructure in Africa. Historically, we have focused primarily on utility scale energy generation and distribution. This sector will continue to grow considering strong energy demand growth and the urgent global energy transition. We expect much of that growth to come from renewables.
We are also excited about the growth opportunities in Commercial & Industrial (C&I) power generation. The C&I solar PV sector in the Middle East and Africa is expected to reach 12GW+ by 2030, driven by supporting regulation and increasing customer demand for green energy. Reflecting our belief in the sector, Actis recently acquired a controlling stake in Yellow Door Energy, the leading distributed C&I solar platform in the Middle East and Africa.
Actis further sees an opportunity in clean hydrogen production in the Middle East and Africa, with countries such as Egypt, South Africa, and others leading the pack with concrete action and announcements.
African Review: Why has Africa traditionally attracted so little investment compared to other regions?
Lisa Pinsley: Understanding how to increase foreign investment requires a nuanced look at the national and subnational level, as countries in this region (and often different cities within a country) have experienced significantly different drivers. Overall, we find that the key inhibitors (which of course vary by country) have included macropolitical challenges, policy and regulatory challenges, and unfavourable market design.
We expect and hope that governments continue to work to enhance the bankability of the projects they are pursuing, in part by taking specific feedback from investors like Actis and supported by partners including DFIs, MDBs, partner countries.
African Review: Why is sustainability so important to Actis?
Lisa Pinsley: Investing sustainably is central to our investment strategy, culture and ethos. Our approach to investing sustainability enables us to deliver positive impact on a global scale.
As investors in sustainable infrastructure, we see a huge investment opportunity in addressing global sustainability goals and our investment process ensures we consider the risk and opportunities arising out of the global energy transition. We are focused on building resilient, future-proofed companies that deliver a transition which is equitable, inclusive and leaves no one behind. In addition to this, as an investor, our overriding goal is to deliver superior returns and this is best achieved through environmental and societal stability, which are vital to economic growth.
Read the full interview, including Pinsley’s insights on how Actis assesses projects to invest in, in the latest issue of African Review here: https://www.africanreview.com/magazine-archives/african-review-may-2023
