UK Climate Investments injects R500m into Revego’s renewables yieldco

Africa’s first dedicated renewable energy yieldco, Revego Africa Energy Limited, has received a R500 million investment from UK Climate Investments. The yieldco is managed by majority black-owned fund manager Revego Fund Managers. 

Revego Africa Energy Limited (Revego) was established by Investec Bank Limited, UK Climate Investments and the Eskom Pension and Provident Fund. The yieldco invests in equity in operational renewable energy assets across South Africa and Africa.

“The renewables sector is at an important point in its growth in South Africa and the rest of sub-Saharan Africa. The portfolio already consists of a number operational, income-earning renewable projects, with further opportunities identified in a growing pipeline,” said Reyburn Hendricks, the Chief Executive Officer of Revego Africa Energy Limited.

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.

“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,” said Richard Abel, Managing Director of UK Climate Investments.

Revego says it will aim to provide shareholders with a targeted dividend yield of approximately 9% – 11%, and will seek to increase this dividend yield over time, with a targeted yield to maturity of approximately 11%.

The assets in Revego’s portfolio have 20-year PPAs with Eskom, thus providing the long-term, stable cash flows investors seek. The asset manager last week announced acquisition of equity in three major wind energy assets operated by Mainstream Renewables SA in South Africa.