UK Climate Investments has committed £15 million (approximately $19.8 million) of follow-on funding to support Revego Africa Energy Limited’s (Revego) long-term growth and mobilise further private finance flows in support of South Africa’s clean energy transition.
Working alongside Investec Bank Limited as well as Eskom Pension and Provident Fund, UK Climate Investments (UKCI) made an initial commitment of R500 million (approximately $31.8 million) earlier this year to help establish Africa’s first dedicated renewable energy yieldco, managed by majority black-owned fund manager Revego Fund Managers. UKCI’s additional commitment will support the further growth of the yieldco as it scales up with a view to listing in the public market in due course and further reduce emissions.
Revego helps complete the investment ecosystem for new clean electricity generation capacity by acquiring equity in operational renewable energy projects across South Africa. This helps developers unlock and subsequently recycle capital into new electricity generation and capacity projects, while also providing an attractive, green asset class for institutional investors.
Revego’s initial portfolio contains stakes in six projects across South Africa representing a combined installed capacity of 605MW. This is enough to provide clean, affordable and reliable electricity to the equivalent of approximately 200,000 homes. With this additional funding and sustained backing from UKCI, Revego’s portfolio is expected to grow at pace over the coming 12-18 months as it pursues a pipeline of investment opportunities across the region.
UK Climate Investments is a joint venture between Macquarie’s Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy, which invests UK International Climate Finance to help developing economies tackle climate change and promote clean, resilient and inclusive growth. UKCI’s latest investment follows a recent commitment made by the governments of South Africa, France, Germany, the United Kingdom and United States, along with the European Union, to mobilise an initial commitment of $8.5 billion to support South Africa’s decarbonisation efforts.
A portfolio to support the clean energy transition
Managing Director at UK Climate Investments Richard Abel: “UKCI is delighted to commit this increased level of support to Revego as it actively develops and grows its portfolio of high-quality assets under management.”
British High Commissioner Antony Philipson said they saw a historic level of ambition with climate finance commitments made at COP26, which are needed to help South Africa and other countries accelerate their clean energy transitions in a just and resilient way. “We are delighted that the additional UK funding for the Revego Africa Energy YieldCo makes a significant contribution to those efforts, aiming to boost investors’ confidence to expand Revego’s impressive renewable infrastructure portfolio and help it pursue long-term growth opportunities.”
Last month, UK Climate Investments and Norfund announced they will finance a joint venture between H1 Holdings and Pele Green Energy to fund their equity participation in a 700MW portfolio of onshore wind farms. Both partners will invest alongside Enel Green Power in one of South Africa’s largest renewable energy equity deals, valued at around $100 million.
UK Climate Investment’s dedicated team of investment professionals have now committed approximately £116 million (approximately $153 million) of UK International Climate Finance over three years to support the development of clean energy and green finance markets in sub-Saharan Africa.
Chief Investment Officer of Revego Fund Managers, Ziyaad Sarang: “UK Climate Investment’s latest investment is a vote of confidence for the strength of our current portfolio and the potential for South Africa to become a renewable powerhouse. The new funding helps position us to achieve our target of doubling Revego’s assets under management in the next 12-18 months.”
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