- Transaction valued at over R100 million reduces cost of capital and accelerates returns for empowerment partners.
- Refinancing targets De Aar 1 and De Aar 2 wind projects with combined capacity of 244.5 MW.
- Deal highlights growing momentum in South Africa’s secondary market for renewable energy assets.
Gaia Renewables 1, listed on the Cape Town Stock Exchange, has concluded agreements to refinance empowerment shareholdings in the De Aar 1 and De Aar 2 wind farms located in South Africa’s Northern Cape.
The transaction, valued at more than R100 million, replaces high cost debt originally used to fund empowerment ownership with a lower cost financing structure aligned to the reduced risk profile of operational assets.
According to Hendrik Snyman, Chief Investment Officer at Gaia Fund Managers, the refinancing significantly lowers funding costs while accelerating the timeline for meaningful economic participation by empowerment stakeholders.
De Aar 1 has an installed capacity of 100.5 MW, while De Aar 2 contributes 144 MW, bringing the combined capacity of the assets to 244.5 MW. Both projects have demonstrated strong operational performance, exceeding initial expectations and delivering stable cash flows.
The refinancing leverages the operational maturity of the wind farms, where key construction and early stage risks have largely been resolved. This enables a more accurate assessment of credit quality and performance, supporting access to more competitive financing terms.
The transaction directly benefits empowerment partners DLO Energy Resources and Obsidian Infrastructure Group, enabling earlier and enhanced economic returns from their equity interests.
Gaia’s strategy focusses on acquiring stakes in operational infrastructure assets with proven performance, supporting both investor returns and broader market development. Transactions of this nature contribute to the growth of a secondary market for renewable energy infrastructure, allowing early stage investors to recycle capital into new developments.
Snyman noted that Gaia has been active in this segment since the early phases of South Africa’s renewable energy programme, identifying strong opportunities to deliver stable, inflation linked returns while supporting the country’s just energy transition.
Primary investors in Gaia Renewables 1 include funds managed by Kruger International Asset & Wealth Management. These include the Kruger Prudential Prescient Fund, Kruger Balanced Prescient Fund, Kruger Equity Prescient Fund and Kruger Income Prescient Fund.
Mia Kriegler, Director of Asset Management at Kruger International, said operational renewable energy projects continue to offer attractive long term, risk adjusted returns for South African investors, while providing diversification benefits and supporting the expansion of clean energy infrastructure.
Under the structure of the transaction, investors in Gaia Renewables 1 will subscribe for listed preference shares, with the fund investing indirectly in the DLO and Obsidian platforms.
The transaction remains subject to standard regulatory approvals and closing conditions.
Author: Bryan Groenendaal
