A New York City-based family foundation whose descendants helped create the fossil fuel industry, has made its first direct investment in a renewable energy company with plans to build wind farms in Africa.
The Rockefeller Brothers Fund of the wealthy Rockefeller dynasty, is backing an energy project in Africa spearheaded by Eddie O’Connor, CEO of Dublin-based Mainstream Renewable Power firm, The Independent reported.
A private grant-making foundation, the Rockefeller Brothers Fund is part of a consortium investing in renewable energy in Africa.
Mainstream said Thursday in a statement it has committed $177.5 million of equity in the Lekela Power project. Of that amount, $117.5 million will come from other investors including the Rockefeller Fund, and $60 million will come from Mainstream.
The Rockefeller Fund’s contribution is $10 million.
The investment will finance Mainstream’s continued expansion of the Lekela Power platform, a London-based pan-African renewable energy platform formed as a joint venture with London-based Actis, a global emerging-market private equity firm.
The funds will help Lekela meet its goal of constructing over 1.3 gigawatts of new power capacity in Africa by 2018, while addressing the challenge of climate change, the firm said in a statement.
Lakela plans to build four new wind farms in South Africa, a wind farm and two solar plants in Egypt, and wind farms in Senegal and Ghana.
O’Connor made a fortune when he sold his Airtricity energy company to Scottish Energy Company SSE in 2008 for over $1.12 billion. The investment by Rockefeller Brothers Fund is a seminal moment in the energy industry, O’Connor said.
“The teaming up of the world’s leading independent renewable power developer with a foundation started by members of the family that effectively founded the global oil industry, is a significant moment in the world’s transition to a new power system based on clean energy,” said Mainstream Renewable Power CEO Eddie O’Connor in a prepared statement.
Rockefeller Brothers Fund was founded in 1940 by the sons of John D. Rockefeller Jr. to “share advice and research on charitable activities and coordinate their philanthropic efforts to better effect,” according to the RBF website.
The fund’s investment assets totaled $816 million in May.
John D. Rockefeller Jr. was the only son of Standard Oil co-founder John D. Rockefeller. Senior founded Standard Oil in 1870 and it made him the world’s richest man. He is credited with revolutionizing the petroleum industry, and with defining the structure of modern philanthropy.
Stephen Heintz, president of the Rockefeller Brothers Fund, said he was glad to invest in Mainstream.
If John D. was alive today, he would recognize the enormous opportunities in the clean energy economy and be at the forefront of the global shift to renewable resources, Heintz said. The investment will bring renewable energy to communities across Africa.
“The opportunity is huge and for us it’s just absolutely in the sweet spot of what we’re trying to do with our impact investing,” Heintz said in a Bloomberg interview. “It’s completely consistent and advances our philanthropic mission, but does so while supporting market-rate investment and business solutions to climate change.”
The Rockefeller Fund has joined a group of 800 people and institutions promising to divest from fossil fuel companies and invest in clean energy. The goal is to put pressure on companies contributing to climate change. Of the fund’s $816 million under management, about $97.5 million has gone to impact investments including the Mainstream funding, Bloomberg reported.
By 2018, the Rockefeller Brothers Fund wants to sell 100 percent of its investments in fossil fuel companies that contribute to global warming, Heintz said.
Its investments in coal and tar sands are 0.1 percent of the portfolio, Rockefeller said this month. Investment in fossil fuel companies has fallen to 3.3 percent, down from 6.6 percent in April 2014.
Investors in Mainstream Renewable Power Africa Holdings, Mainstream’s funding vehicle for Lekela, include: The Rockefeller Brothers Fund, IFC, the IFC African, Latin American and Caribbean Fund (ALAC) and the IFC Catalyst Fund, two funds managed by IFC Asset Management Company, Ascension Investment Management and Sanlam.
“We hope this will be the first investment of many from impact investors in this sector,” O’Connor said in a statement.
Mainstream and Lekela are helping to fulfill objectives of a series of key international initiatives, including U.S. President Barack Obama’s Power Africa, which aims to add 30,000 megawatts of clean power generation through government and private partnerships, and the U.N.’s Sustainable Energy for All, which seeks to achieve universal access to power by 2030.