Fund management firm Gaia Infrastructure Partners has concluded a landmark equity transaction in the Dorper wind farm project, a preferred bidder under Round 1 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) run by the Department of Energy (DoE).
Gaia believes this project paves the way for local investment in the secondary infrastructure market in renewable energy. It is the first transaction of its kind and will have long-term benefits for the REIPPPP, as it opens the market to new investors, says the company.
The Dorper wind farm project was completed in 2014, after Gaia submitted a proposal to the DoE for a 30% equity stake to be assumed by a South African pension fund. The proposal was approved by the DOE, which gave the green light for the transaction to take place.
Gaia CEO John Oliphant says the company is "extremely excited by this excellent initiative", which brings investment in renewable energy back home and opens up more opportunities for pension fund investors to match this asset with pension liabilities. Transactions such as this will increase local shareholding in the renewable energy sector, as well as benefit long-term investors such as pension funds.
"We are very pleased with this demonstration of our ability to facilitate for our clients to gain long-term exposure to infrastructure investment opportunities. This is a significant milestone in our growth as, to date, we have concluded transactions to the value of R1.35bn in the renewable energy sector,” says Oliphant.
Established and run by investment, engineering and strategy veterans, Gaia focuses on serving the interests of long-term investors and developing exit avenues for infrastructure developers and private equity investors.
Through opportunities such as this, Gaia is assisting investors with little or no experience in renewable energy to benefit from REIPPPP activities. The company continues to look for opportunities to empower infrastructure equity holders to sell assets to long-term investors.