Johannesburg-based bank Absa Group Ltd (JSE:ABG) has joined forces with clean energy solutions provider African Rainbow Energy and Power (AREP) to create a new African-led renewables investment platform with some ZAR 6.5 billion (USD 443m/EUR 377m) of gross assets.
The bank said it would make an initial investment of ZAR 500 million in cash, and transfer ZAR 5 billion of its existing renewable energy assets to the platform, which the partners named African Rainbow Energy.
AREP will contribute over 700 MW of wind, solar PV and biomass-based projects to the new entity as an initial investment, adding to the joint push to expand the pool of funding available for renewable energy development in South Africa.
Starting with a total of 31 renewable energy assets from the founding partners, African Rainbow Energy will invest in projects including solar, wind and battery storage. According to Absa, the platform has already secured “a deep investment pipeline” and partnered on a number of bids into round 5 of South Africa’s Renewable Energy Independent Power Producer Programme (REIPPP).
“The fund will provide investors with exposure to utility-scale, commercial and industrial sector clean-energy investments, building a platform of scale in South Africa, and will seek selected, bankable projects in Africa,” said Brian Dames, the CEO of African Rainbow Energy.
The plan is to eventually list the platform on the Johannesburg stock exchange once it achieves growth, Dames added.
The effective date of the fund is subject to the fulfillment of certain conditions, which the parties expect to be concluded in the fourth quarter of 2021, Absa said.
(ZAR 1.0 = USD 0.068/EUR 0.058)
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