A USD125 million investment in Mali for the construction of three solar powered electricity plants is being launched by South African company, Gestalt Growth Strategies.
Gestalt has a thirteen-year track record of facilitating development projects which comprise technical, financial and management support and skills transfer, with the long-term objective of empowering local communities.
A procurement agreement with the Mali government was recently signed whereby the Mali government will buy the electricity produced by the solar plants for the next 25 years.
The price structure has been agreed upon, sovereign guarantees are in place and Gestalt is in the process of finalising a financial risk insurance instrument to protect the government, the investors and the local stakeholders.
A Danish technology partner is on board and Gestalt is currently securing financial backing through its funding arm, Gestalt Fund Managers.
Chairman of the Gestalt Group, Mannie Hirsch, says that this project is the result of the Mali government’s enthusiastic support for the Gestalt model of setting up community-owned businesses in rural economies.
“The deal in Mali will ensure that money sticks to the fingers of the local community,” says Hirsch.
Hirsch sees the Gestalt model as a solution to eradicating poverty in Africa. While Hirsch states there is huge appetite for investment into Africa, local communities and their political leaders need to ensure that there is a quid pro quo.
“It is not enough to come in to an impoverished community and build infrastructure. Capacity building within the community and community ownership of that infrastructure is key to its long-term sustainability,” explains Hirsch.
While the Mali deal is providing an opportunity for investors as well as for the Danish contractors, the terms of the deal are that the investors will have to sell the facility to the local community down the line.
Gestalt will provide the skills training and management support as well as set up a community-owned trust which will receive share ownership in the project from day one. Gestalt has similar projects in the pipeline in other African countries.