South Africa: African Infrastructure Investment Managers in solar plants deal
African Infrastructure Investment Managers (AIIM) has acquired – through its IDEAS Managed Fund (IDEAS) – majority stakes in three new solar power plants in South Africa.
The 30MW portfolio of facilities, which reached financial close in May 2022, are expected to reach commercial operation in March and April 2023. They will connect via a combination of wheeling and behind the meter solutions, feeding energy into mining company Harmony’s operations in the Welkom area in South Africa.
Construction is anticipated to commence in June 2022. When all three power facilities are fully operational, it is expected that they will deliver 68GWh of clean energy in the first twelve months of operations and 1.3TWh over the 20-year lifespan of the facilities.
In aggregate, these rank as some of the largest solar photovoltaic plants for commercial and industrial private offtake in South Africa to date.
The portfolio has been financed through a mix of debt and equity. Equity was funded by IDEAS and the Mahlako Financial Services-managed Mahlako Energy Fund. Debt was provided by Rand Merchant Bank (RMB), a division of FirstRand Bank Limited.
Commenting on the transaction, Sean Friend, investment director at AIIM and co-portfolio manager of the IDEAS Managed Fund said, “Together with our partner Mahlako, we are excited to conclude this transaction and create a long-lasting partnership with Harmony. This portfolio further entrenches IDEAS as a leading investor in renewable energy, as well as the commercial and industrial private power market in particular. We look forward to pursuing additional investments in this sector, in light of the focus on clean energy and the need to pursue a sustainable energy mix for South Africa.”
According to Mitesh Pema, principal of the Mahlako Energy Fund 1, “This investment is testament to Mahlako’s commitment to energy security and sustainable investments, while providing superior returns for our investors. Further to our ESG principles enshrined in our investment process, we actively seek out opportunities that contribute towards South Africa’s clean energy goals.”
African Clean Energy Developments (ACED), an AIIM affiliate, is the development and management service provider to the independent power producer. ACED has served as the technical lead and transaction managers on the projects and will manage the construction process. Energy Infrastructure Management Services (EIMS), another AIIM affiliate, will manage the operations once the projects reach their commercial operations date.
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