AIIM backs South African arm of existing solar energy portfolio co with $73 mn

 AIIM backs South African arm of existing solar energy portfolio co with $73 mn

African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers, said Tuesday it has committed ZAR 1.25 billion ($73 million) equity and shareholder funding to the South African subsidiary of an existing solar energy company.

Last week, renewable energy services provider Starsight Energy and South African-based solar firm SolarAfrica Energy said they would merge to become one of the continent’s leading solar players.

AIIM said it has committed fresh funding to the South African subsidiary of the merged entity to accelerate the build-out of the contracted pipeline in the commercial and industrial (C&I) wheeling market in the country, providing green energy and certainty of pricing to large C&I customers.

Olusola Lawson, Managing Director and co-Head at AIIM, said: “The additional equity and loan funding extended through our IDEAS Infrastructure I Partnership will empower the merged entity to boost the supply of reliable solar energy and we look forward to supporting this continued growth.”

This is the fourth deal under AIIM’s IDEAS Fund this year. AIIM had topped up the AUM under IDEAS with $370 million last October, taking its size to almost $1.5 billion. IDEAS has funded projects which contribute around 25% of renewable energy currently supplying the electricity grid in South Africa through its renewable energy portfolio of more than ZAR10 billion in value.

 In April, IDEAS and a new fund under AIIM led a consortium for a deal in the logistics sector.

Two months later IDEAS Fund struck a deal to invest in African waste recycler EnviroServ. It also bought majority stake in a set of three new solar projects.

Starsight Energy was founded in 2015 and is backed by sector-agnostic private equity firm Helios and AIIM, a member of Old Mutual Alternative Investments. It currently offers energy and cooling solutions – on- and off-grid – to the C&I sectors, with key operations in East and West Africa having over 656 sites in Nigeria, Kenya, and Ghana.

Founded in 2011, SolarAfrica has extensive experience in delivering energy solutions through power purchase agreements to businesses across Southern Africa. It has evolved from a specialist provider of rooftop solar photovoltaic systems to a full-service provider of capex-free, green energy solutions ranging from solar and battery storage options through to wheeling and electricity trading to the C&I market.

In January 2019, SolarAfrica had inked a joint venture with private equity firm Inspired Evolution for a ZAR100 million equity investment facility which enabled a fund size of up to ZAR500 million to finance solar PV solutions.

Once approved, the merged entity will comprise a portfolio of over 220MW of operated and contracted generation capacity and 40MWh of operational battery storage, with an additional generation pipeline exceeding 1GW, spanning three key geographical hubs – Southern, East and West Africa.

Vivek Sinha

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