Norwegian development finance institution, Norfund, and the UK Climate Investments (UKCI), have announced that they will jointly finance the 40% equity participation of H1 Holdings and Pele Green Energy into a 700 MW portfolio of onshore wind farms in South Africa.
A joint venture of H1 Holdings and Pele Green Energy will invest in the wind energy projects alongside Enel Green Power. The deal is one of South Africa’s largest renewable energy equity deals valued at around $US100 million. Enel Green Power is set to retain a 60% ownership interest in the wind energy portfolio.
The investments will ensure the participation of black investors in the renewable energy projects in alignment with South Africa’s Black Economic Empowerment (BEE) policy. The portfolio of wind farms will also make annual social investments in host communities which have historically been disadvantaged. These BEE investments will help strengthen H1 Holdings and Pele Green Energy as leading Independent Power Producers (IPPs) in the South African market.
“This partnership and investment 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. We’re proud to be a part of the solution to transition towards a lower-carbon energy system,” said Richard Abel, Managing Director of UKCI.
Pele Green Energy will assume a more operational role across the portfolio, and will also bring its technical expertise given their experience in operation, management and maintenance of utility-scale renewable power plants.
Commenting on the deal, Norfund’s Vice President for Clean Energy, Bjørnar Baugerud said; “Norfund believes that providing increased access to affordable renewable energy is an effective way to contribute to creating jobs and improving lives. Increasing the share of renewables in the South-African energy mix is also an important contribution to limit the climate crisis. We are confident that this new partnership will be an effective tool to reach our common goals.”
The projects will contribute to avoid an average of 2.2 million tonnes of CO2 emissions annually, or 43.8 million tonnes over the lifetime of the projects, when estimated with the IFI approach “GHG Accounting for Grid Connected Renewable Energy Projects. That is equivalent to the emissions of half of the total number of cars in Norway.