Gaia Fund Managers has introduced Gaia Renewables REIT, the first specialized real estate investment trust (REIT) in South Africa that focuses on on-site private electricity generation for commercial and industrial clients. Teaming up with Blue Energy Africa, an on-site clean energy solutions developer, Gaia Renewables REIT aims to tap into the significant market for commercial and industrial renewable energy, estimated to be valued at over R200 billion.
The REIT will issue batches of preference shares to qualified investors, with plans to list them on the Cape Town Stock Exchange. These shares will finance on-site solar power projects. Gaia Fund Managers has a successful track record in renewable energy transactions, having raised and deployed over R3.5 billion across 12 projects since 2012.
Unlike large-scale utility projects that can take years to construct, on-site solar power solutions are built within months, enabling investors to receive returns sooner. The projects offer predictable cash flows through long-term power purchase agreements with commercial and industrial electricity off-takers. These agreements typically include modest price escalations in line with inflation.
Gaia Renewables REIT aligns with investors’ environmental, social, and governance (ESG) goals, as it contributes to the United Nations’ Sustainable Development Goals, particularly in the areas of affordable and clean energy and climate action. Additionally, the REIT presents an opportunity for South African retirement funds looking to increase their infrastructure allocations, as recent changes allow up to 45% investment in infrastructure assets.