African Infrastructure Investment Managers involved in South African solar deal

Phakwe Group, with the support of African Infrastructure Investment Managers (AIIM), has achieved financial close on a secondary renewable energy transaction, to become the 90%-owner of Witkop Solar Park, a 30MW solar PV facility located in the Limpopo province, South Africa.

The deal marks further expansion by Phakwe and AIIM in South Africa’s clean energy market, with its assets generating some 27.4% of the total clean energy on South Africa’s grid.

Project Witkop has been operational since 2015 and is part of the first group of projects to connect to the national grid under the South African Renewable Energy Independent Power Producer Programme (REIPPP). On average, the solar power plant generates 62,000MWh per annum of electricity which is sold into the national grid to Eskom Holdings SOC Ltd, benefiting over 6,000 households.

This deal concludes Phakwe’s ninth investment in a renewable energy project, and results in a portfolio that now comprises over 500 MW of generation capacity.

Thabiso Tenyane, executive chairman at Phakwe Group commented, “We are delighted to be the first to achieve this milestone in South Africa’s renewable energy programme and to be working with AIIM once again – their expertise in the clean energy sector and their commitment to enhancing Black Economic Empowerment (BEE) objectives in South Africa, is second to none. With its funding, AIIM has helped position Phakwe Power, a 100% black-owned and managed IPP, as a leading participant in one of the fastest growing and most dynamic sectors in the South African and global economies.”

AIIM – through its IDEAS Managed Fund – provided funding to Phakwe in two phases, beginning in 2018 when Phakwe acquired a 39% shareholding in Core Energy (RF) Pty Ltd. Following AIIM’s recent transaction, Phakwe has increased its total shareholding in Core Energy to 90%, making it one of the first majority black-owned and controlled IPPs in the South African REIPPP programme.

Lebogang Pholoba, investment manager at AIIM, who led the deal commented, “This marks AIIM’s second investment in Phakwe Witkop, and our 29th standalone investment in South Africa’s renewable energy sector. In addition to generating clean, reliable energy, we are tracking various indicators as part of our efforts to further local social and economic causes in Polokwane and the surrounding area. Our focus areas for this particular project include improving outcomes in early childhood education, developing school infrastructure and primary healthcare facilities.”

Since its foundation in 1999, AIIM’s IDEAS Managed Fund has completed 39 investments across a number of infrastructure sectors, and has delivered strong long-term investment returns and simultaneously achieved positive social and environmental objectives, in line with its mandate.

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