AIIM successfully exits renewable energy investments worth over R750 million
As South Africa grapples with ongoing electricity shortages and a heavy reliance on aging coal-fired power plants, renewable energy remains critical to ensuring long-term energy security and economic stability. With a strong secondary market emerging for renewable energy assets, strategic investment and successful exits are becoming increasingly important in shaping the future of the country's energy landscape.
In a significant milestone highlighting this trend, African Infrastructure Investment Managers (AIIM) a subsidiary of Old Mutual Alternative Investments, through its IDEAS Fund, has successfully exited stakes in three prominent renewable energy assets, in a transaction valued at over R750 million. The assets include two solar photovoltaic (PV) projects and one wind project, all developed under South Africa’s Renewable Energy Independent Power Producers Procurement Programme (REIPPPP).
The transaction involves the sale of AIIM's 21% stake in the Jeffreys Bay Wind Farm, a 138 MW facility located in the Eastern Cape, to existing shareholders in the project Enzani and Usizo. Additionally, AIIM has exited its 10% holdings in both the Kalkbult (73 MW) and Linde (38 MW) Solar PV projects in the Northern Cape, with Gaia Renewables 1, listed on the Cape Town Stock Exchange (CTSE), acquiring these stakes.
Zaahid Ganey, Investment Director at AIIM said: “AIIM has been a committed investor in these high-quality renewable energy assets since their financial close more than 12 years ago and they have delivered strong returns while contributing significantly to the sector’s growth. This successful exit reinforces AIIM’s strong track record in renewable energy, aligns with our strategic focus on majority-controlled investments and ensures value realisation for our investors.”
The assets involved were initially constructed to provide reliable and sustainable energy, under 20-year power purchase agreements with Eskom, thereby supporting the country’s transition to cleaner energy. This exit highlights both the IDEAS Fund's capability to realise substantial returns for investors and the strong appetite within South Africa’s secondary market for renewable energy infrastructure.
Additionally, the assets have had a tangible social impact in the local communities through cumulative social spend in excess of R100 million since commercial operations, which involved either charitable support for community projects or facilitating small business creation.
Renewable energy investments have seen significant growth in South Africa over the last decade, driven largely by the government’s commitment to diversifying its energy mix and reducing carbon emissions. This growing market has created opportunities not only for initial investors but also for secondary buyers looking to enter established projects with proven performance.
The IDEAS Fund has been instrumental in pioneering renewable energy investment in the region, setting benchmarks for financial returns and operational excellence. By facilitating a successful exit of these assets, the fund is continuing its role in creating investor confidence and supporting the sustainable development of critical infrastructure through investment into new greenfield projects.
"Gaia is proud to take over the torch from AIIM," says Hendrik Snyman, Chief Investment Officer of Gaia. "These pioneering renewable energy projects, built with a robust and low-risk approach, have demonstrated an excellent operational track record and we are confident they will continue to deliver inflation-linked returns to our investors. With Gaia's expertise, we also see exciting opportunities to further optimise and enhance the use of these assets in the years ahead."
Bheki Lembede (CEO of Enzani), and Sakhi Dumakude (MD of Usizo), jointly commented that “Enzani and Usizo are happy to be growing their renewable energy footprint, in line with the objectives of the Ubuzwe Group. Jeffreys Bay wind farm is a fantastic asset and increasing our presence helps us get closer to this objective”.
The transactions have reached financial close, showcasing AIIM and the IDEAS Fund’s ongoing commitment to unlocking investor value and driving growth within South Africa's renewable energy sector.