- Macquarie-managed UK Climate Investments (UKCI) and Norfund announced they are financing a joint venture between H1 Holdings and Pele Green Energy to fund their 40% equity participation in a 700 MW portfolio of onshore wind farms in South Africa.
- Both partners will invest alongside Enel Green Power in one of South Africa’s largest renewable energy equity deals valued at around $US100 million.
UKCI and Norfund’s investment aims to accelerate South Africa’s transition to a low carbon economy, with a strong emphasis on enhancing Black Economic Empowerment (BEE). To this end, the portfolio will make annual social investments in their host communities which have historically been disadvantaged. These BEE investments will strengthen the joint venture partners as leading Independent Power Producers (IPPs).
The investment from UKCI strengthens the UK Government’s commitment to supporting a green post-COVID-19 recovery in South Africa. It also exemplifies the kind of innovative climate financing and partnership between Development Finance Institutions and the private sector promoted through the Climate Finance Leadership Initiative (CFLI).
Macquarie and Enel are founding private sector members of CFLI, and Norfund has been a leading participant among the European Development Finance Institutions who have partnered with CFLI members in emerging and developing markets.
Bjørnar Baugerud, Vice President – Clean Energy in Norfund, said: “Norfund believes that providing increased access to affordable renewable energy is an effective way to contribute to create jobs and improve lives. Increasing the share of renewables in the South African energy mix is also an important contribution to limit the climate crisis. We are confident that this new partnership will be an effective tool to reach our common goals.”
British High Commissioner to South Africa, Antony Phillipson, said: “The UK Government is committed to making sizeable climate finance investments here in South Africa. This latest initiative from UK Climate Investments will support the expansion of renewable energy and boost local ownership in the sector. It is vital that we maximise the potential of renewable energy as South Africa looks to tackle its current energy deficit and deliver their ambitious Nationally Determined Contribution (NDC) with its targets for emissions reductions by 2030. This is a key part of delivering a Just Transition.”
Reyburn Hendricks, CEO of H1 Holdings said, “H1 is proud to play a role in assisting the portfolio of wind farms to become a reality. We look forward to working with our funding partners, UKCI and Norfund, as well as our fellow shareholders, Enel Green Power and Pele Green Energy, in contributing to meeting South Africa’s commitments to a lower-carbon energy system.”
H1 Holdings, Pele Green Energy and Enel Green Power, who will retain a 60% ownership interest in the portfolio, have a proven track record of successfully delivering renewable energy projects in South Africa, as well as other markets.
Author: Bryan Groenendaal