- Bloomberg reports that South Africa’s Nedbank Group Ltd. and Norwegian investment firm Norfund AS are acquiring a “substantial minority” stake in Pele Green Energy (Pele).
- Previously in December 2023, Nedbank and Norfund announced a $132 million loan to Pele for renewable energy projects. Read more
Pele is a South African Black Economic Empowerment (BEE) infrastructure and development company co-founded in 2009 by five black shareholders with backgrounds mostly from finance and investments. Pele started out as financial BEE investor and has now grown into a locally owned fully integrated Independent Power Producer (IPP) that develops, owns, procures, constructs, and operates renewable energy projects.
The firms will invest $31 million in Pele Energy Group, said Pele’s Chief Financial Officer Matt Wainwright. “The investment is the second leg to a larger transaction where the company raised $135 million in a structured loan from Nedbank, Norfund and South Africa’s Industrial Development Corp.,” added Wainwright, without disclosing the exact size of the stake.
Infinity Power (part of Masdar) recently won six of the eight projects totalling 1280MW with Pele Green Energy in South Africa’s renewable energy independent power producer programme (REIPPPP) Bid Window 7. This has raised questions on the preferential treatment of BBBEE companies and how the IPP Office adjudicates projects because Pele appears to be diluting their BBE ownership profile after winning bids and along with their consortium members from a previous round, is contesting payment of a bid bond. The Engie/Pele Green Energy/Sannapos Solar PV Consortium are also allegedly contesting payment of their bid bond of R15 million for a failed 75MW solar project in Bid Window 5.
Pele Green Energy offered the following response,
‘The specifics around the BW5 bid bond are in front of the courts and we are unable to comment at this time. What we can confirm is that we will abide by the decision of the courts. We can confirm that neither us nor the other organisations that have had projects not reach financial close, are in any way precluded from participating in any bid window and have continued to do so under the rules of the programme’.
Broad-based Black Economic Empowerment (BBBEE) is an integration programme launched by the South African government, forming part of the governments broader Black Economic Empowerment efforts, to reconcile South Africans and address the inequalities of apartheid by attempting to compensate for land that was repossessed from Africans. It encourages businesses to integrate black people in the workspace, support black businesses, and give back to poor black communities affected by land repossession. Businesses are awarded points which they can claim on a BBBEE certificate which entitles them to a greater chance of obtaining government contracts. Link to the BBBEE Act here.
The company expects the projects to close between September this year, and March 2026, said Wainwright.
Author: Bryan Groenendaal
