UK-backed fund invests $34m into Africa’s first renewable energy yieldco

UK Climate Investments (UKCI) program has fulfilled its cornerstone commitment of $34m (R500-million) into Africa’s first renewable energy yieldco. The funds will be managed by Revego Fund Managers.

Being a majority black-owned fund manager, Revego aims to tackle the challenge of a lack of access to electricity in sub-Saharan Africa and accelerate the deployment of new clean electricity generation capacity. It achieves this by acquiring equity in operational renewable energy projects across the region, helping developers unlock and recycle capital.

UK Climate Investments has established this green finance vehicle alongside Investec Bank and the Eskom Pension and Provident Fund. The initial portfolio will comprise stakes in six projects across South Africa, with a combined installed capacity of 605 MW. Revego intends to continue to grow its portfolio through the acquisition of new assets across the region.

UK Climate Investments is a joint venture between Macquarie’s Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy which is helping the world’s emerging economies to tackle climate change and promote cleaner, greener, and inclusive growth.

Richard Abel, Managing Director of the UK Climate Investments, said, “UK Climate Investments has now been investing in sub-Saharan Africa for over three years. During that time, we’ve seen significant growth in the appetite of investors looking to be part of this fast-developing region’s green transition.

The establishment of Revego Africa Energy 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.”

Through the financing program, the UK is demonstrating the transformative impact that international climate action can have through its support of economic growth and job creation in sub-Saharan Africa, helping to build resilience to future shocks.

UK Climate Investments also recently marked the delivery of its latest project in South Africa – Kruisvallei Hydro – a run-of-river hydropower facility which it part-financed alongside majority black-owned renewable energy investor H1 Holdings. The project takes the total capacity of renewable electricity financed through the partnership in South Africa to 254 MW.

“The renewables sector is at an important point in its growth in South Africa and the rest of sub-Saharan Africa. The portfolio already consists of a number operational, income-earning renewable projects, with further opportunities identified in a growing pipeline,” said, Reyburn Hendricks, CEO, Revego Africa Energy Limited,