SOUTH AFRICA: AIIF2 sells its shares to IDEAS in 2 renewable energy projects

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SOUTH AFRICA: AIIF2 sells its shares to IDEAS in 2 renewable energy projects: ©Jub-Job/Shutterstock

IDEAS Managed Fund, an investment fund set up by African Infrastructure Investment Managers (AIIM), has just bought the shares of another AIIM subsidiary in two renewable energy projects in South Africa. The Cookhouse wind farm, with a capacity of 139 MW, and the Reisa solar power plant, with a capacity of 75 MW, located respectively east and north of Cape Town in South Africa, have thus changed hands.

Africa Infrastructure Investment Fund2 (AIIF2) and Ideas Managed Fund, two affiliated subsidiaries of the private equity firm African Infrastructure Investment Managers (AIIM), announced on May 4, 2020 that they have entered into major share sale and purchase agreements for two renewable energy projects in South Africa. As a result, 14% of the Cookhouse wind farm and 34% of the Reisa solar power plant, previously held by AIIF2, were acquired by Ideas Managed Fund.

The sale of these assets is not linked to a performance issue. It is explained by the strategic options adopted within the AIIM Group. After closing its doors in 2011, the fund manager is currently investing in its complementary fund, AIIF3, which is AIIM’s third pan-African fund, focusing mainly on energy and transport infrastructure in sub-Saharan Africa.

One of the largest investors in renewable energy in South Africa

IDEAS Managed Fund, which has been a shareholder in the Cookhouse and Reisa projects since their financial close in 2012, has almost doubled its assets following the buy-back agreement with AIIF2. “With approximately $1 billion of assets under management, IDEAS becomes one of the largest investors in the South African Renewable Energy Supply Programme (REIPPP). We have interests in 27 projects in Phases 1 to 4 of this programme, making IDEAS one of the largest equity investors in the renewable energy sector in South Africa,” said Paul Frankish, Chief Investment Officer at AIIM.

AIIF2 sold its shares in the Cookhouse Wind Farm, a project in which it held a 14% stake. The plant, which has a capacity of 139 MW, is located 7 km east of the town of Cookhouse in the Eastern Cape Province. In addition to AIIM (through its investment funds), the facility is also owned by Old Mutual, a major Cape Town-based insurance company, and the local community, in line with the requirements of the South African government’s Independent Renewable Energy Supply Programme (REIPPP).

The Reisa solar farm was also part of the AIIF2 project portfolio. With a capacity of 75 MWp, this plant is located in the Northern Cape Province, near Deben and Kathu. AIIF2 had a 34% interest in it. The other shares are held by Old Mutual, Builtafrica Kathu, the local community and other investment funds managed by AIIM. The solar park was also built under the REIPPP.

It is therefore important infrastructure for the South African renewable energy supply programme. The southern African country is aiming for 10,000 Gigawatts per hour of renewable energy. The Minister of Energy estimates that 3,725 megawatts of renewable energy are needed to ensure a continuous and uninterrupted supply of electricity.

Boris Ngounou

and Jean Marie Takouleu

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