Alcazar Energy Partners raises $337m from investors to fund growth in new markets

Eight investors participated in the funding, including the European Investment Bank

Investment in solar energy in the Mena region is accelerating. Abu Dhabi's Al Dhafra is home to one of the world’s largest solar power plants. Source: Wam

Alcazar Energy Partners, an asset manager focused on renewable energy, said it raised nearly $337 million from investors including the European Investment Bank to fund its growth in new markets.

The amount was raised for a Luxembourg-based fund named Alcazar Energy Partners II. It has a final target size of $500m and a hard cap of $650m, the company said on Monday.

Alcazar said eight investors participated in the funding, also including the European Bank for Reconstruction and Development and the International Finance Corporation, the private-sector lending arm of the World Bank.

The transaction will “enable the development and construction of over 2 gigawatts of clean energy infrastructure across selected emerging markets”, said Alcazar.

“AEP-II is privileged to have the confidence of an outstanding group of public and private institutions to invest and develop in renewable energy projects, mobilising more than $2 billion of foreign direct investment from OECD economies to build sustainable infrastructure where it is needed most,” said Daniel Calderon, managing partner of Alcazar Energy.

The fund has signed an initial agreement with Egypt to invest in a green hydrogen-based ammonia facility with 230,000 tonnes per year capacity.

“A number of European and Asian investment grade off-takers have expressed a strong interest in providing an off-take agreement for the project,” said the company.

Last year, a consortium of companies led by China Three Gorges South Asia Investment bought Alcazar Energy, which was backed by Mubadala Investment Company.

The UAE, Saudi Arabia, Jordan, Egypt, Morocco and Oman have developed various solar projects and are home to some of the world's biggest initiatives.

Between 2015 and 2020, the UAE increased renewable power generation by more than 18 times from 136 megawatts to 2,540. It is also looking at some of the world’s biggest renewable projects, including the Mohammed bin Rashid Al Maktoum Solar Park, which could be the largest ever built and generate up to 5GW.

Abu Dhabi's clean energy company Masdar, with investments worth $20bn globally, is rapidly expanding its renewables portfolio as countries focus on cutting emissions to limit global warming.

“To meet the Paris climate goals and strengthen global energy security, the world’s energy systems must decarbonise as soon as possible,” Ambroise Fayolle, EIB vice-president, said.

“To do this, the financial system needs to mobilise trillions of dollars from private sector green energy projects.”

The global energy crisis triggered by Russia’s invasion of Ukraine could “hasten” the transition to renewable energy, the International Energy Agency said in its World Energy Outlook last month.

Investment in renewable energy needs to double to more than $4 trillion by the end of the decade to meet net-zero emissions targets by 2050, the agency said.

The IEA’s stated policies scenario, or Steps, which is based on the latest policy settings worldwide, expects clean energy investment to rise to slightly more than $2tn by 2030.

Capital investments in renewables are set to reach $494bn in 2022, outstripping upstream oil and gas at $446bn for the year, said research company Rystad.