South Africa: Climate Fund Managers to acquire biogas project
Climate Fund Managers, via its managed funds Climate Investor One and Climate Investor Two, has committed $38.5 million in construction equity funding to Bio2Watt Energy Holdings (BEH) to acquire the 4.8 megawatt Bronkhorstspruit Biogas Project in Gauteng, South Africa, and expand it to 9.8 megawatt.
South Africa currently sees approximately 3.67 million tonnes of waste annually not being collected and treated through formal waste collection systems, which results in illegal dumping. Organic waste earmarked for composting still ends up in landfills and, although biodegradable, creates liquids and methane gas in the breakdown process. The broken-down liquid can carry harmful chemicals from other non-biodegradable waste items into water systems and the soil. Utilising anaerobic digestion to transform organic waste into green energy and organic fertiliser provides an effective solution to the landfill problem.
BEH is a developer of waste-to-value projects with a pipeline of opportunities to generate over 330 gigawatt hours (GWh) of renewable energy for the corporate and industrial markets in South Africa and Mozambique. Each project sources organic waste streams from local areas and produces biogas for green energy production and organic fertiliser via anaerobic digestion. Anaerobic digestion is a sequence of processes by which microorganisms break down biodegradable material by removing its oxygen. The BEH pipeline projects will help alleviate the strain placed by increased pressure on South Africa and Mozambique to provide waste management services for the increasing organic waste generation. BEH represents an attractive opportunity for Climate Fund Managers by contributing to a circular economy investment platform, which will supply baseload power to clients with positive climate change mitigation benefits.
Sebastian Surie, regional head for Africa at Climate Fund Managers said, “Waste management forms a significant challenge for many African countries, resulting in water pollution and emissions of toxic gases, therewith negatively affecting climate and public health. The Climate Investor One and Climate Investor Two investments will allow us to build a waste-to-value platform for Africa, tapping into the significant business opportunity that the sector has to offer, whilst at the same time providing a mitigant for these issues. We look forward to embarking on this journey with our partner BEH.”