Macquarie-managed UK Climate Investments (UKCI) and Norfund are financing a joint venture (JV) between H1 Holdings and Pele Green Energy to fund a 40% equity participation in a 700 MW portfolio of onshore wind farms.
Both partners will invest alongside Enel Green Power in one of South Africa’s largest renewable energy equity deals valued at about $100-million.
In addition to tackling the country’s challenge of a lack of access to electricity, UKCI and Norfund’s investment will also aim to accelerate South Africa’s transition to a low-carbon economy, with a strong emphasis on enhancing black economic empowerment (BEE).
To this end, the portfolio will make yearly social investments in their host communities which have historically been disadvantaged.
These BEE investments are posited to strengthen the JV partners as leading independent power producers.
The investment from UKCI is also said to strengthen the UK government’s commitment to supporting a green post-Covid-19 recovery in South Africa.
It also exemplifies the kind of innovative climate financing and partnership between development finance institutions (DFIs) and the private sector promoted through the Climate Finance Leadership Initiative (CFLI), the companies state.
Macquarie and Enel are founding private sector members of CFLI, and Norfund has been a leading participant among the European DFIs that have partnered with CFLI members in emerging and developing markets.