South Africa’s AIIM acquires 50% stake each in nine power plants

African Infrastructure Investment Managers (AIIM) has acquired stakes in nine new solar and wind power plants in South Africa.

AIIM, which is one of Africa’s largest and most experienced infrastructure-focused private equity fund managers and a member of Old Mutual Alternative Investments (OMAI) made the acquisition of 50.01 percent equity in each of the plants, through its IDEAS Managed Fund.

The nine power facilities expected to be fully operational at the end of 2020, will provide an additional 800 MW of renewable energy capacity into South Africa’s national power grid. The power facilities will deliver about 2,425 GWh annually, preventing around 2.4 million tonnes of carbon emissions from traditional fossil fuel power plants per annum.

When operating at full capacity, the nine plants (Bokamoso 67.9MW, Waterloo 75MW, Droogfontien II 75MW, Zeerust 55MW, Greefspan II 75MW and De Wiltd 50MW) are expected to supply enough green electricity to power about 522,730 medium-sized South African homes.

Sean Friend, Investment Director at AIIM said “The new plants will provide essential clean energy to the grid which, in addition to environmental benefits, will help boost economic growth by creating jobs in construction and follow-up operations and maintenance. We also expect the investment to stimulate further economic development in the areas where the new renewable facilities are located.

“We are looking at almost R9 billion in total capital expenditure across these power projects, where IDEAS is the main Sponsor. Being able to successfully conclude deals of this scale reflects the strength and depth of AIIM’s team which has the expertise necessary to handle a sponsorship role of this magnitude.”

The additional clean power capacity has been added under Round 4 of the South African government’s Renewable Energy Independent Power Producer Procurement programme (REIPPP), which is committed to securing 2,300MW of new renewable electricity for South Africa’s national grid over the next five years.

Through IDEAS’ position as the lead sponsor of the projects, AIIM facilitated social and economic benefits which include 100 percent SA ownership, 50 percent direct black ownership, greater than 65 percent black ownership including indirect black ownership, and 40 percent black participation in engineering, procurement and construction (EPC) contracts, and the transition to majority black-owned operations and maintenance contractors.

The Fund has also acquired stakes in three wind farm projects.