African Rainbow Energy and Power has Partnered with Absa in a new Renewable Energy Entity

Patrice Motsepe-backed African Rainbow Energy and Power has launched a renewable energy investment business that will see the company invest in up to 700 MW in green projects.

The vehicle, which is a partnership with Absa, will invest in solar, wind and biomass energy projects, with the bank making an initial investment of R500 million, and a transfer of R5 billion of its existing renewable energy assets to African Rainbow Energy.

The new entity, African Rainbow Energy, will be one of the largest and most diverse independently owned energy businesses in the country. The company says it has already secured a “deep investment pipeline” and has partnered on a number of bids into Round 5 of the Renewable Energy Independent Power Producer Programme.

African Rainbow Energy chief executive Brian Dames said renewables were one of the most successful asset classes globally, offering a unique mix of attractive long-term, inflation-linked returns, and that the company would be “engaging with other investors to increase its equity base and fund further growth, with the aim of listing on the JSE in future”.

The company is also expected to invest in the private power sector and is working with several companies on bespoke energy solutions.

South Africa is increasingly looking to renewable energy to diversify electricity generation, with the state-owned power utility Eskom looking to decommission some of its old power stations.

Absa interim chief executive Jason Quinn said the scale of their investment in African Rainbow Energy spoke to the confidence they have in the entity and that the bank does not only bring capital to the initiative, but expertise and experience in renewable energy financing.

Fin24

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