Mid-market black alternative asset manager, Moshesh Partners, has reached a first close for its first Renewable Energy and Clean Infrastructure Fund. The company is targeting R2 Billion in assets under management in the next 18 months. This is in addition to the more than 2,000 MW pipeline of solar, wind and storage projects it has already secured.
This first close positions Moshesh partners well on its journey to be South Africa’s leading B-BBEE renewable energy fundDaniel Palm, Co-founder and Chief Investment Officer (CIO) at Moshesh Partners
“Our investment team has a strong track record in renewable energy, having already raised and deployed more than R5 billion in renewable energy projects,” says Sifiso Shongwe, co-founding member and chief executive officer of moshesh partners. “This includes raising and deploying capital via equity, mezzanine and debt into projects totaling 2,507 mw across solar PV, wind, CSP, plastic to fuels, and open-cycle gas turbine plants,” Shongwe added.
Moshesh’s timelines for investment are in 2021, with investment committee (IC) approved investments due for deployment by the end of the second quarter. Its Renewable Energy and Clean Infrastructure Fund anticipates equity returns of 16-18%, uncorrelated to securities markets. It will deploy debt and equity refinancing and structuring to further boost returns, comfortably out-performing all other major asset classes in Sub-Saharan Africa.
Moshesh targeting Bid Window 5 IPP projects
South Africa’s Department of Mineral Resources and Energy announced the long awaited Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) on March 18. DMRE has plans to issue a further four requests for proposals in the next 12 months for procurement of new renewable energy capacity. Moshesh hopes to play a key role in financing and investing in some of the projects in the upcoming bid window.
“Projects included within the REIPPPP are long-dated with real returns, with guaranteed off-take with Eskom that is backed by Treasury,” says Daniel Palm, co-founding member and chief investment officer of Moshesh Partners. “They offer stable cash flows, high yields, and bankable security, along with a strong social and environmental impact.
South Africa’s updated Integrated Resource Plan 2030 (IRP 2030) expects nearly 30,000 MW of new capacity to come online by 2030, with 6,000MW allocated to solar PV and 14,400MW to wind energy, in addition to 500 MW per year allocated to distributed generation, which equates to R50 billion in investment required over the next 10 years.
South Africa recently lifted the threshold for licensing for embedded generation projects from 1MW to 10MW. This opened opportunities for further investment in distributed generation projects. Moshesh is currently under exclusivity with two JSE listed firms to provide on-site as well as wheeling of power to their entire operations in South Africa.