Patrice Motsepe’s AREP & ABSA launch new renewables investment entity

African Rainbow Energy and Power (AREP), owned by South African billionaire and mining magnate, Patrice Motsepe, and ABSA have launched a new entity called African Rainbow Energy. The entity will be an investment platform for African renewable energy projects.

AREP will make an initial investment of assets covering wind, solar photovoltaic and biomass projects with an installed capacity of more than 700 megawatts of renewable energy. Absa will make an initial investment of R500 million in cash and transfer R5 billion of its existing renewable energy assets to African Rainbow Energy.

The investments by the two entities will result in African Rainbow Energy having approximately R6.5 billion of gross assets, covering 31 renewable assets, making it one of the largest and most diverse independently owned energy businesses in South Africa.

The establishment of African Rainbow Energy expands the pool of funding available for renewable energy developments in South Africa, at a time when the country is accelerating its plans to expand and diversify its energy base through the Renewable Energy Independent Power Producer Programme (REIPPP). 

Commenting during a press briefing, Patrice Motsepe said; “This energy company would also contribute to the growth of the South African economy and the economies on the rest of the African continent while improving the living conditions of the poor, unemployed and marginalised. Absa is a like-minded partner that shares our vision of building this initiative at scale in Africa.” 

African Rainbow Energy will invest in renewable technologies including solar, wind, and battery energy storage solutions. It has already secured a deep investment pipeline and has partnered on a number of bids into Round 5 of South Africa’s highly successful REIPPP.

“Renewables have been one of the most successful asset classes globally offering a unique mix of attractive long-term, inflation-linked returns and growth providing significant scope to deploy further funds. African Rainbow Energy is engaging with other investors to increase its equity base and fund further growth with the aim of listing on the JSE in future,” said Brian Dames, African Rainbow Energy Chief Executive Officer.