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Three private fund managers back investment firm to buy into Redstone CSP project

Redstone CSP project

Redstone CSP project

20th February 2023

By: Marleny Arnoldi

Deputy Editor Online

     

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Private fund managers Mahlako Energy Fund (MEF), Mergence Investment Managers and Third Way Investment Partners have teamed up to fund a fellow investment company, Aventro Investments, to help increase its shareholding and involvement in the Redstone 100 MW concentrated solar power (CSP) project, near Kimberley, in the Northern Cape.

The funding arrangement brings together a women-led investment team to support another women-led investment firm in boosting its shareholding in the Redstone CSP and molten salt project.

Redstone is the first of its kind to be developed in South Africa, with the capability of operating at full capacity for 12 hours in the absence of solar irradiation. It forms part of the country’s Renewable Energy Independent Power Producer Procurement Programme.

Once in operation towards the fourth quarter of this year, the $800-million project is expected to operate for more than 30 years.

The then Department of Energy in January 2015 awarded the contract to develop the CSP project to a consortium comprising energy developers Acwa Power and Solar Reserve.

Aventro is an active participant in the Redstone project, both as a local shareholder and a partner involved in the development, procurement and construction of the project.

Besides Aventro, Solar Reserve and Acwa, other investors in the project include the Public Investment Corporation, Old Mutual Life Assurance South Africa and Pele Green.

The deal is being orchestrated by Mahlako Financial Services, whose innovative approach to how it deploys its capital investment has enabled the country’s first wheeling project to come into operation, as well as the country’s largest power purchase agreement under the amended Electricity Regulations.

In turn, Mergence has invested about R1.5-billion in 14 renewable energy projects since 2010, totalling 600 MW of capacity.

Moreover, Third Way’s fund-of-fund model also allows domestic retirement funds of various sizes to access diversified exposure to this growing asset class. Third Way has a proven investment record, with its R3.5-billion Infrastructure Debt Fund 1 having exposure to more than 30 renewable energy projects.

Aventro is a black-owned investment company with extensive experience in the fields of smart proprietary technologies in the energy sector. It also has interests in the mining, property and agricultural sectors.

Aventro has set a target of having R10-billion of investments under management by June 2024.

“The investment into Aventro accelerates the development of renewable energy capacities, while adding much-needed dispatchable energy during peak. We are excited to conclude this transaction alongside Mahlako and Third Way to create a long-lasting partnership,” says Mergence investment associate Tshepiso Appie.

Aventro representative Tebogo Nkosi adds that the investment is testament to the fact that, with innovative funding models, coupled with partnerships and commitments to energy sector transformation, more black industrialists can be unearthed and contribute to South Africa’s 35 GW renewable energy requirement.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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