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Stanlib launches country’s first dedicated energy transition asset investment fund

Stanlib franchise and portfolio manager Johan Marnewick
Standard Bank South Africa project and export finance head Asanda Tsotsi and Standard Bank Group corporate credit analyst Adil Rajkaran

Stanlib executives and partners unpack the rationale and workings of the Khanyisa Energy Transition Fund

Stanlib franchise and portfolio manager Johan Marnewick

Photo by Creamer Media

Standard Bank South Africa project and export finance head Asanda Tsotsi and Standard Bank Group corporate credit analyst Adil Rajkaran

Photo by Creamer Media

30th November 2023

By: Marleny Arnoldi

Deputy Editor Online

     

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Specialist investment manager Stanlib has launched the Khanyisa Energy Transition Fund (KETF) to spark investment in energy transition assets.

Khanyisa, meaning “to illuminate”, is a range of funds created by Stanlib to advance economic and social benefits across the country, with the United Nations’ Sustainable Development Goals (SDGs) in mind.

The KETF will initially focus on South African rand denominated assets; however, it is Stanlib’s intention to grow the footprint of the fund to also include pan-African assets, to achieve similar energy transition outcomes.

Partners to the fund, Standard Bank and Liberty, will provide initial seed capital of R3-billion, which Stanlib will manage. In time, the fund aims to raise R20-billion from a range of local and global investors to deploy energy transition assets.

Stanlib franchise and portfolio manager Johan Marnewick says the KETF is the first credit fund dedicated to energy transition assets in South Africa. He explains that the fund has different classes of investment to cater for varying risk appetites and returns.

He highlights that the renewable energy sector offers predictable cash flows and smooth returns, owing to the long-term nature of assets.

Standard Bank head of energy and infrastructure finance Aadil Cajee adds that the fund will leverage a demonstrable pool of assets to provide seed capital to ensure the fund is credible. “Renewable energy as an asset class is not always easily accessible to investors,” he states, adding that the KETF provides just such a platform for investment for all types of investors.

Stanlib Khanyisa Impact Investment Fund manager Kholofelo Molewa points out that the fund will not only focus on renewable energy generation assets, but also other technologies that are part of the energy transition, such as transition fuels, critical minerals, green hydrogen and cleaner transport.

The SDGs relevant to the objectives of the fund include SDG 7, which speaks to energy efficiency and access to renewable energy sources; SDG 9, which relates to resilient infrastructure and sustainable industrialisation; SDG 11, which encompasses inclusive and sustainable cities and human settlements; and SDG 13, which involves urgent action to combat climate change.

Standard Bank South Africa project and export finance head Asanda Tsotsi says the KETF comes at a time when 560-million sub-Saharan Africans do not have access to electricity, a 3 ˚C rise in global temperature could cost the African economy $2.1-trillion, and amid severe weather and increasing water scarcity.

He believes an energy transition in all countries is critical, with funds such as the KETF aiming to drive economic growth, create jobs, provide access to electricity and take action on sustainability.

Tsotsi adds that, for a long time, South African investors only had access to renewable energy assets through the Renewable Energy Independent Power Producer Procurement Programme, which has since its inception added 6 200 MW of renewable energy to the grid; however, more opportunities on gas-to-power and decentralised energy are surfacing.

He believes there is a great opportunity to advance bankable renewable energy assets in South Africa.

Molewa says the fund will be deemed successful if it results in the scaling of renewable energy technologies and solutions, mobilises more climate financing and contributes positively to climate commitments.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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