Revigo Fund Management, which runs Africa’s first fund focused primarily on investing in operating renewable energy assets, is seeking new investors as it works towards its eventual listing.
Article Content
(Bloomberg) — Revigo Fund Management, which runs Africa’s first fund focused primarily on investing in operating renewable energy assets, is seeking new investors as it works toward an eventual listing.
The fund manager wants to raise about R3 billion ($165 million) to invest in projects to add to the R2 billion Revigo Africa Energy Fund, a so-called revenue company focused on dividend streams, said chief investment officer Ziad Sarang. The company will consider listing when its assets under management reach about $500 million and currently has a pipeline of about R10 billion in potential investments, Sarang said.
Advertisement 2
Article Content
“We are in the due diligence phase with two investors currently,” Sarang said in an interview. “The ideal investors at this stage are development finance institutions that come to help us scale in collaboration with institutional investors and pension funds.”
The open-ended fund – set up to invest in assets across sub-Saharan Africa – was ready to invest as of August 2021. Its initial backers include a joint venture between the UK government and Macquarie Asset Management Ltd. It offers investors a return while freeing up capital for developers to build new factories.
“What we are focusing on is recycling capital from developers,” Sarang said, adding that a study his firm commissioned shows the region needs $193 billion in renewable energy investment by 2031. “To increase that amount of investment and broaden the investment base, you really need an efficient financial system that has both upstream investment and secondary market capital recycling.”
In addition to the Macquarie-British joint venture known as UK Climate Investments LLP, Revigo’s initial funders are Investec Bank Ltd and Eskom’s Pension and Provident Fund, which manages pensions for workers at South Africa’s public utility.
Advertisement 3
Article Content
He said Eskom could invest more, but the other two “anchor investors” were unlikely to do so.
“The long-term goal is to eventually list this on an exchange,” Sarang said. “Institutional investors are interested in two things. They are interested in liquidity and they are interested in size.”
Sarang has spent 25 years working in transactions in the energy, mining and infrastructure sectors. He is the former Head of Infrastructure at Standard Bank Group Ltd and has worked at Investec.
Although the fund focuses on the region, all ten of its investments to date are in South Africa, which has by far the largest renewable energy industry in sub-Saharan Africa.
Last year, the fund invested in a 150MW solar power plant in South Africa’s Free State province, which will be the first to sell electricity to multiple private sector buyers, including mining company Sibanye-Stillwater Ltd and beer company Anheuser-Busch InBev NV.
Article Content
