UK Climate Investments has fulfilled its cornerstone commitment of ZAR 500m (~£25m) to help establish Africa’s first dedicated renewable energy yieldco, managed by majority black-owned fund manager Revego Fund Managers.
UK Climate Investments is a joint venture between Macquarie’s Green Investment Group (GIG) and the UK Government’s Department for Business, Energy and Industrial Strategy (BEIS), which invests UK International Climate Finance to help the world’s developing economies tackle climate change and promote clean, resilient and inclusive growth.
Clean, reliable and affordable energy can be a critical enabler of poverty alleviation, sustainable economic development and the creation of communities more resilient to the challenges posed by climate change. Despite having some of the world’s best renewable energy sources, almost 600 million people in sub-Saharan Africa live without access to electricity.
Whilst this number has been in steady decline over recent years, the COVID-19 pandemic has halted progress. 13 million more people lacked access to electricity in 2020 compared to the previous year.
Revego aims to tackle this challenge and accelerate the deployment of new clean electricity generation capacity by acquiring equity in operational renewable energy projects across South Africa, helping developers unlock and recycle capital. UK Climate Investments has established this innovative green finance vehicle alongside Investec Bank Limited and Eskom Pension and Provident Fund.
The initial portfolio will contain stakes in six projects located across South Africa, with a combined installed capacity of 605 MW. Revego intends to continue to grow its portfolio through the acquisition of new assets across the region.
“UK Climate Investments has now been investing in sub-Saharan Africa for over three years. During that time, we’ve seen a significant growth in the appetite of investors looking to be part of this fast-developing region’s green transition. The establishment of Revego Africa Energy is another sign of the growing maturity of the market, and an indication that the future of green finance in sub-Saharan Africa will be bright.”