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 in Jordan. It will also evaluate investments in SMEs serving clean energy, energy efficiency and water markets within the broader MENA region and internationally.
CMCF secured significant commitments from blue chip international investors including many European DFIs (Development Finance Institution). As of Q2 2021, CMCF has invested in three operating solar PV projects in Jordan and one project in Egypt-with USD-based “take or pay” agreements in place.
CMCF builds on Catalyst’s fourteen years of experience in the renewable energy and energy efficiency sectors in the MENA region. Catalyst has secured the first four solar PV power project investments with a total 109.4 MW in capacity. Moreover, Catalyst is in negotiations to acquire 25% stake in a second project in Egypt by Q4 2021.
CMCF combines high investor returns with strong risk mitigations. High returns are achieved thru a 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. Low risk countries 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.
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.
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 has invested most its capital into high quality solar PV projects in Jordan and Egypt. These projects 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. 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.