Norfund and Macquarie-managed UK Climate Investments (UKCI) 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. Both partners will invest alongside Enel Green Power in one of South Africa’s largest renewable energy equity deals valued at around $US100 million.
Increased access to clean, reliable, and affordable energy is a critical enabler of social and economic development, and the investment will aim to accelerate South Africa’s transition to a low carbon economy.
Avoiding 2,2 million tons of CO2-emissions
The projects will contribute to avoid an average of 2.2 million tonnes of CO2 emissions annually, or 43.8 million tonnes over the lifetime of the projects, when estimated with the IFI approach “GHG Accounting for Grid Connected Renewable Energy Projects. That is equivalent to the emissions of half of the total number of cars in Norway.
The investment will also have a strong emphasis on enhancing Black Economic Empowerment (BEE), and the portfolio will make annual social investments in host communities which have historically been disadvantaged. These BEE investments will strengthen the joint venture partners as leading Independent Power Producers (IPPs).
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.
BJØRNAR BAUGERUD, VICE PRESIDENT CLEAN ENERGY NORFUND
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 been working with CFLI members on partnering together in emerging and developing markets.
H1 Holdings is renowned for its fundraising abilities, thus fulfilling a crucial element of the global requirement to increase funding for renewable energy and climate action. Pele Green Energy, which will assume a more operational role across the portfolio, will bring technical expertise given their unique position as one of the few South African IPPs that controls and operates a utility-scale power plant.
Enel Green Power, who will retain a 60% ownership interest in the portfolio, has a proven track record of successfully delivering renewable energy projects in South Africa, as well as other markets.