Revego Africa Energy Limited (Revego), South Africa’s only yieldco geared towards the renewable energy sector through its investment in the Revego Africa Energy Fund, has acquired stakes in a number of leading wind assets, all of which are helping to build South Africa’s clean energy future.
The acquisitions include the Mainstream wind assets, Loeriesfontein 2 Wind Farm, Khobab Wind Farm and Noupoort Wind Farm, situated in the Northern Cape.
Loeriesfontein and Khobab (completed in December 2017) each have capacity of 140 MW and Noupoort (completed July 2016) has a capacity of 80 MW. The assets were built as part of Bid Window 3 of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), led by sponsors Mainstream Renewables SA, a leading developer of wind and solar PV projects.
Eskom is the sole off-taker for all power produced by the three wind farms through a 20-year Power Purchase Agreement (PPA) as part of the REIPPP. The PPA is backed by the Government Support Framework Agreement (GSFA), whereby the South African government provides support to Eskom in an event of default.
Revego has purchased the wind assets from Metier, one of Africa’s leading private equity fund managers, and Lereko, who jointly manage the Lereko Metier Sustainable Capital fund. The acquisition fits in with Revego’s strategy of taking stakes in operational renewable energy assets in sub-Saharan Africa that have a track record of generating stable cash flows and that deliver an above-inflation dividend yield over an extended period.
Metier’s Sustainable Capital practice targets investments in energy efficiency, renewables, water and waste management businesses, as well as projects supporting Africa's development objectives and environmental commitments.
“We are pleased to have played a part in three of the largest wind assets in South Africa and their contribution to building a thriving renewable energy sector in the country,” said John Hannig, a principal in Metier’s Sustainable Capital practice.
Revego CEO Reyburn Hendricks says that collectively, the three wind farms generate clean renewable energy, supplying electricity to power up to 310,000 South African households, positively impacting the country’s economy and its people.
“As a renewable energy source, wind power generates zero carbon emissions and uses only a minimal amount of water, unlike traditional power stations. This makes it the perfect energy source for a region of the country that is characterised by high winds and arid conditions,” he explains.
In addition to the provision of electricity to households in their areas, wind farms have also contributed to social and economic upliftment. “Local communities have a direct shareholding in the assets, while the wind farms also employ and train people from the community, helping to build a skill set in what is likely to be a growth industry in the future,” adds Hendricks.
“We are proud of the wind farm portfolio which together with our fellow shareholders Genesis evolved from development through to operations. This achievement is aligned with our objective of ensuring our investments generate additionality for both the environment and importantly local communities in remote areas where opportunities can be limited. We wish Revego the very best for the next chapter” said Marc Immerman, principal in Metier’s Sustainable Capital practice
Hendricks also points out that the wind assets directly address a number of the UN’s Sustainable Development Goals (SDGs), in particular SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth), SDG 9 (industry, innovation and infrastructure) and SDG 13 (climate action).
“The investments, therefore, fulfil the environmental, social and governance (ESG) requirements of our investor base,” notes Hendricks.
He adds that all three wind farms continued operating in full during the Covid-19 lockdowns, with staff following Covid-19 protocols. “Local healthcare centres have been able to count on the essential power and water supplies provided by these assets, in order to treat patients during the third wave of the pandemic,” says Hendricks.
Revego’s portfolio now consists of three wind and one solar asset and has secured a wind and a solar asset, all of which have 20-year PPAs with Eskom, thus providing the long-term, stable cash flows investors seek. In addition to the three mainstream wind assets noted above, Revego’s assets will include:
Aurora Wind Power – a 94MW wind farm located in the Western Cape, built as part of Bid Window 2 of the REIPPPP, and led by sponsor Engie Energy International, one of the largest energy players globally and have extensive experience in developing and operating renewable energy plants. Aurora became operational in June 2015 and has a PPA with Eskom until June 2035.
Kathu Solar Park – a 100 MW concentrated solar power thermal energy project located in the Northern Cape. It was built as part of Bid Window 3 of the REIPPPP, led by sponsor Engie Energy International.
The project became operational in February 2019, with a 20-year PPA, valid until February 2039.
Bokpoort CSP – a 50MW concentrated solar power (CSP) thermal energy power plant located in the Northern Cape. It was developed by Metier and built as part of Bid Window 2 of the REIPPPP, led by sponsors ACWA Power, one of the largest energy players globally with extensive experience in developing and operating renewable energy plants. The project became operational in March 2016 with a 20-year PPA, valid until March 2036.
“We are pleased to have rapidly built up scale within Revego in some of South Africa’s most important renewable assets and to be able to provide our investors with the basis to meet their sustainability and return goals,” concludes Hendricks.
About Metier: Metier is an independent private equity fund management business with a proven track record in Africa spanning four decades. Metier’s Sustainable Capital Practice has garnered significant traction since its inception in 2010. The practice targets investment in energy efficiency, renewables, water and waste management businesses and projects supporting Africa's development objectives and environmental commitments.
About Revego Africa Energy Limited (Revego): Revego is a yield-focused specialist BEE investment vehicle that will participate as an equity investor in, predominately, operational renewable energy assets in sub-Saharan Africa with a track record of generating stable cash flows. Revego aims to provide shareholders with a targeted dividend yield of approximately 9% - 11% and will seek to increase this dividend yield over time, with a targeted yield to maturity of approximately 11%.