UK development finance institution CDC and Norwegian investment vehicle Norfund are to invest ZAR600m (€36m) in South-African renewables investment and development company H1 Capital to help the latter fund a pipeline of over 2400MW of new wind and solar projects.
Norfund will invest ZAR360m and CDC, which will soon be renamed British International Investment, ZAR240m.
They said the investment demonstrates commitment by the UK and Norway to act on pledges made at COP26 – scaling climate finance to Africa and deepening collaboration on solutions that will meet the continent’s needs and address the climate emergency.
Norfund chief executive Tellef Thorleifsson said: “At Norfund we are honoured that the Norwegian government has entrusted us with the responsibility of managing the new climate investment fund.
“We are delighted to be able to put the money to work quickly and effectively through what will be the first investment under the new mandate, with our existing partners in H1 and CDC, in projects in line with the energy plans of the South African government”
Norwegian Minister of International Development Anne Beathe Tvinnereim said: “I believe that the new Norwegian climate investment fund managed by Norfund will be our most efficient tool to help accelerate the global clean energy transition, making it possible to base necessary development on renewable energy and limit the climate crises devastating impacts on the world’s poor.
“I am confident that this first investment under the new climate mandate will be the first of many mutually beneficial partnerships that contribute to a just transition in South Africa and in the other markets that Norfund aims to prioritise”.
CDC Group chief executive Nick O’Donohoe said: “We are delighted to once again partner with Norfund on this investment in H1 Capital, which will help increase clean energy access for people, communities, and businesses across South Africa.
“This investment marks another key step toward fulfilling our pledge to devote greater capital to fund clean infrastructure and to support markets like South Africa on their path toward a just transition.
“This investment signals our strengthened relationship with South Africa and clearly signals Britain’s commitment to help accelerate economic productivity and inclusive growth for Africa’s green recovery.”
UK Minister for Africa Vicky Ford said: “South Africa’s target to generate 20GW of new renewable capacity over the next ten years is indicative of the country’s bold steps toward securing a net-zero future for itself.
“$16m of UK investment in H1 Capital demonstrates our continued commitment to remaining a strong partner for Africa, to help address the urgent climate challenge, and promote clean and equitable growth that will ensure African economies can build back better.”
“Investments like this reaffirm and follow on from the commitment we have made to South Africa’s low-carbon transition through the $8.5bn multi-donor Just Energy Transition Partnership.”
H1 Capital chief executive Reyburn Hendricks said: “H1 is excited to be able to partner with Norfund and CDC to achieve our purpose of improving the quality of lives.
“South Africa needs access to long-term, patient capital to develop the large-scale energy projects required for reliable, clean power supply and economic development.
“H1 hopes that the partnership fostered with Norfund and CDC can be replicated with other players and projects in Sub-Saharan Africa.”