Futuregrowth Asset Management is investing R165-million in five projects in round three of the Department of Energy's (DoE's) Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

This brought the total number of REIPPPP projects in which Futuregrowth was involved, through its Power Debt Fund (projects in round one and two) and its Development Equity Fund (round three projects) to 23, the company said on Wednesday.

The five third-window projects in which Futuregrowth was involved included a 111 MW wind farm at Gibson Bay, in the Kouga municipality, in the Eastern Cape, which was awarded to Italian Enel Green Power. Futuregrowth was a development equity partner in the 37-turbine Gibson Bay wind farm. The project was scheduled to enter commercial operation in early 2017, generating in excess of 424 GWh/y at a fully indexed price of 66.4c/kWh, the lowest tariff bid in round three.

In addition to this, Futuregrowth was an equity partner in a consortium led by global wind and solar company Mainstream Renewable Power, which was awarded preferred-bidder status for three large-scale wind energy projects in the Northern Cape, with a combined generation capacity of 360 MW. The Mainstream projects, representing a total investment of about R9-billion, were the Khobab wind farm and Loeriesfontein 2 wind farm, both with 140 MW capacity, in Namakwa, and the 80 MW Noupoort windfarm in Umsobomvu.

The fifth project was a R2.05-billion 86 MWp (megawatt-peak) ground-mounted solar power plant, which was expected to generate about 210 GWh/y. The project was secured under a codevelopment agreement between Total SA and Mulilo Renewable Energy.

Each of the five projects had secured a 20-year offtake purchase agreement with State-owned power utility Eskom.

Futuregrowth, on behalf of its clients, had provided debt financing of over R4-billion for 18 energy projects during rounds one and two – in wind, solar photovoltaic and concentrated solar thermal – and expected to provide more funding in the secondary market.

In total, the REIPPPP provided for the procurement of 3 725 MW of renewable energy over five phases. In round three, the DoE received 93 bids and last month announced the 17 preferred bidders. The DoE announced, however, that due to the large number of responses it may reconsider additional preferred bidders in round three.

Futuregrowth renewable-energy specialist Margo Buchanan said the company may pick up more projects later this year and said its success was due, in part, to having been involved in the REIPPPP process from its inception.

"In round three, Futuregrowth achieved a 45.5% success rate in our bids compared with an average success rate of 18%. In addition, we won four out of four of our bids for onshore wind, which is 60% of the total allocation in this phase," she pointed out.

Buchanan said these investments in renewable-energy projects presented a growing asset class in local capital markets and offered a “unique opportunity for Futuregrowth’s clients to access a pool of assets not normally available to institutional investors”.

She further said Futuregrowth was a long-term player in the renewables space and had a unique offering to renewables projects because of its ability to invest across the capital structure in senior debt, mezzanine debt and equity, depending on the needs of the project. “We expect an exciting few years to come as this space continues to grow.”