AIIM deal spree continues with ninth transaction of 2022 in South Africa

 AIIM deal spree continues with ninth transaction of 2022 in South Africa

African Infrastructure Investment Managers (AIIM) said Thursday it has inked an agreement to invest $90 million (ZAR 1.6 billion) for creating a new renewable energy platform, NOA Group Holdings (Pty) Ltd, marking the ninth deal in the continent since January.

The transaction will be financed through a mix of equity provided by AIIM’s South African IDEAS Fund and the latest iteration of AIIM’s dollar denominated pan-African investment fund, AIIF4.

NOA Group is a vertically integrated energy platform that seeks to provide net zero-oriented renewable energy solutions to customers in the commercial and industrial sectors of the economy. It has developed a range of solutions for customers through the provision of large-scale wheeled energy generation utilising wind, solar and storage technologies.

The investment strengthens AIIM’s position as one of the leading investors in South Africa’s renewable energy landscape with projects representing over 1.9GW of solar and wind generation capacity.

NOA aims to develop, finance and operate a portfolio in excess of 1GW of renewable energy assets over time.  Initial funding will be utilised to conclude the construction of existing projects and achieve financial closure on projects amounting to almost 100MW.

It will be launched by a team comprised of veterans of the South African renewable and commercial and industrial energy sectors and is led by Karel Cornelissen, the former Chief Executive Officer of Energy Partners.

South Africa has a large, and growing, shortfall in energy availability. Between 30 and 50GW’s of new capacity is likely to be required over the next 10 years if South Africa is to meet its nationally determined contributions under the Paris Climate Agreement and to mitigate the current energy crisis.

Ed Stumpf, Investment Director at AIIM, commented: “South Africa is at a pivotal point in the evolution of its energy landscape with the imminent retirement of ageing coal power stations, a significant energy sector infrastructure deficit and increasing liberalization of the market paving the way for an acceleration of investment in net-zero oriented businesses such as NOA.”

AIIM will also seek to develop bolt-on investment prospects in other key African markets where it has portfolio investments and on-the-ground experience to ensure that NOA can establish itself as a regional energy solutions provider in key energy demand hubs across the continent.

For AIIM, this comes just two days after it committed to invest $34 million into Kenya’s Road Annuity Programme. AIIM, Africa’s largest dedicated infrastructure private equity manager, said its new pan-African AIIF4 Fund picked up a 74% stake in Lots 15 and 18 of Kenya’s road programme from Mota-Engil. This deal was struck via AIIF4.

NOA is AIIF4’s fifth investment. It will add to a portfolio that comprises co-controlling interests in Eastcastle infrastructure, a build-to-suit telecommunications towers platform that it backed last year besides two portfolio companies it added earlier this year, outside of the asset in Kenya. These two companies include The Logistics Group, an integrated ports operator and logistics service provider in Southern Africa, and cold chain logistics platform Commercial Cold Holdings.

In addition, AIIM has invested in four companies via its IDEAS Fund with the latest transaction coming last month.

With NOA, which is via both IDEAS and AIIF4, AIIM has struck nine deals since January this year.

AIIF4 is AIIM’s fourth pan-African infrastructure fund, a thematic investor focusing on the digital infrastructure, energy transition, and mobility and logistics sectors across Africa.

Vivek Sinha

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