NextEnergy establishes €400m fund for African renewable energy

Dec. 12, 2011 - Kari Williamson - renewableenergyfocus.com

NextEnergy Capital has begun fundraising for ix:Africa, a €400 million private equity impact fund dedicated to ethical investment in renewable energy, environmental business and clean technology projects in Africa.

NextEnergy Capital and IDC, the South African development bank, have also committed seed capital to launch ix:Africa’s showcase project, a 6.5 MW solar energy development in South Africa.

Approximately 80% of the renewable energy fund will be committed to permitted power generation and infrastructure projects, with the remaining 20% used to invest in pre-permit power plant development and to prepare early-stage clean technology for the market.

A portion of the fund’s profits will go to a charitable foundation, diffusing impact investment in clean and renewable energy to other social initiatives, including in food, housing and health projects.

Showcase
The 6.5 MW showcase solar project is located in the Waterberg region, 300 km north of Johannesburg, South Africa.

The solar development is expected to create 355 jobs during construction and a further 215 jobs for solar module production in South Africa. On-site, 85 long-term (25 year) jobs could be created.

Total project investment stands at ZAR200m (€18m) and ix:Africa owns 57% of the project and will invest ZAR120m, with the remaining 43% being provided by local investors such as IDC.

A Community Trust, financed by the South African development bank through a dedicated line of credit, will hold a 21% stake in the solar plant, ensuring that dividend flows will finance local development initiatives in areas such as education, training and health.

ix:Africa has also acquired a 20% stake in AfriTrak, an African solar tracking solution utilised in the Waterberg project. AfriTrak expects to develop 360 MW of installed capacity in the next five years in Southern Africa, creating 5000 long-term jobs.

“This showcase project has been developed to demonstrate the potential for impact investing to generate considerable social, economic and environmental dividends that will positively affect financial returns to investors”, explains Stefano D.M. Sommadossi, Founding Partner at NextEnergy Capital and a Senior Executive at ix:Africa.

“We know that an ethical approach to capital investment can deliver extremely attractive returns, especially in renewable energy. Ethics and returns can be symbiotic.”