- Patrice Motsepe’s African Rainbow Energy and Power (AREP) and one of South Africa’s big five banks, Absa, have launched a new entity called African Rainbow Energy as an African-led, world-class, renewable energy investment platform.
AREP will make an initial investment of assets covering wind, solar photovoltaic and biomass projects with an installed capacity of more than 700 megawatts of renewable energy. Absa will make an initial investment of R500 million in cash, and transfer R5 billion of its existing renewable energy assets to African Rainbow Energy. This will result in African Rainbow Energy having approximately R6.5 billion of gross assets, covering 31 renewable assets, making it one of the largest and most diverse independently owned energy businesses in South Africa.
The establishment of African Rainbow Energy expands the pool of funding available for renewable energy developments in South Africa, at a time when the country is accelerating its plans to expand and diversify its energy base through the Renewable Energy Independent Power Producer Programme (REIPPP). The private sector is simultaneously expanding its energy supply. This is an important step for the South African economy, which aims to source reliable and cost-effective renewable energy to drive growth and employment.
Related news: AREP buys 40% stake in SOLA Group
This collaboration supports AREP’s objectives to utilise modern and renewable energy technologies to provide affordable electricity in South Africa and on the African continent. Absa is uniquely positioned given its key role in the African continent’s economy and its commitment to the development of renewable energy and the green economy. Absa is a leading funder in the renewable energy market and this transaction expands its participation in this important sector.
African Rainbow Energy will invest in renewable technologies including solar, wind, and battery energy storage solutions. It has already secured a deep investment pipeline and has partnered on a number of bids into Round 5 of South Africa’s highly successful REIPPP.
African Rainbow Energy will also invest in the private power sector and is working with several companies on bespoke energy solutions.
Author: Bryan Groenendaal