South Africa: ‘Load shedding is an opportunity’ for private equity (

South Africa: ‘Load shedding is an opportunity’ for private equity


This article was first published in the Southern African Venture Capital and Private Equity Association (SAVCA) annual journal.

Jaco Maritz takes a closer look at private equity investment in South Africas power sector and highlights emerging prospects within the industry.

While many focus on the fact that the load shedding crisis is reducing growth in the economy, private equity fund managers are increasingly seizing opportunities to invest in the electricity sector. Load shedding is an opportunity for our portfolio companies to provide energy solutions, says Steven Faure, investment director for southern Africa at energy focused investment manager, Inspired Evolution.

Over the past decade, private equity firms have played a meaningful role in adding new generation capacity by investing in independent power producers (IPPs) that supply renewable energy to South Africas state utility, Eskom, as part of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

To date, the REIPPPP has awarded over 6,000 MW of projects.

Notable private equity investments in the power sector over the past year include AIIMs commitment to provide up to 90million in initial equity funding for an initiative called NOA, which aims to develop, finance, and operate a portfolio of over 1GW of renewable energy assets.

In another transaction, Third Way Investment Partners joined forces with the Mahlako Energy Fund and Mergence Investment Managers to invest in Aventro, facilitating an increase in Aventros shares in the 100MW Redstone concentrated solar power project in the Northern Cape.

Faure says Inspired Evolution prefers to back vertically integrated renewable energy companies involved in the entire value chain, including site development, construction, operation, and ownership of wind or solar farms.


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