The Government Employees Pension Fund (GEPF) has allocated R13-billion for investment in various sectors of the economy to create jobs and contribute to renewable energy, food security and broad-based black economic empowerment (BBBEE).
The fund has signed private placement memoranda with the Public Investment Corporation (PIC) for investment in three investment funds. The PIC’s Isibaya division will manage the funding.
R5-billion has been allocated to the Environmental Sustainability Fund, R3-billion to the Priority Sectors Investment Fund and R5-billion to the South African Private Equity Fund.
The Environmental Sustainability Fund would invest in renewable-energy projects, as well as in energy efficiency, energy storage, clean energy and recycling projects.
This was expected to contribute to the generation of 500 MW of renewable-energy capacity and 300-million litres of biofuel a year. The fund would create about 3 000 jobs during and after the construction of renewable-energy plants and recycling centres.
The Priority Sectors Investment Fund would focus on projects in the manufacturing, agriculture, tourism, mining beneficiation and agroprocessing sectors that would have a positive impact on job creation and food security. This fund was aimed at creating more than 3 000 jobs, of which 25% would be in rural areas.
Lastly, the South African Private Equity Fund would focus on medium to large capital buy-outs, as well as mergers and acquisitions. It would seek to increase companies’ BBBEE to levels one and three over three to eight years measured over the ten-year span of the portfolio.
The GEPF said it expected to make further commitments to two additional funds – the Economic Infrastructure Fund and the Africa Private Equity Fund – during this year.
The R13-billion investment formed part of the GEPF’s long-term developmental investment strategy, which entailed the allocation of 5%, or about R60-billion, of its asset value for investment in commercially viable local projects that would have positive, long-term impacts on development, in addition to providing the financial return expected by the board.
GEPF principal officer John Oliphant said the sustainability of the fund’s investment portfolio was intrinsically linked to the growth of the South African economy.
“With more than R1-trillion of assets under management, representing one-third of the South African gross domestic product, we think it is prudent to invest in projects that contribute to economic growth and job creation. This, we believe, is in the best interest of our investment portfolio in the long term,” he noted.