AIIM invests $90m into integrated energy platform NOA Group

African Infrastructure Investment Managers (“AIIM”), one of Africa’s largest infrastructure-focused private equity fund managers, has agreed to provide initial equity funding of up to USD90 million (ZAR1.6 billion) to support the establishment of a new renewable energy platform NOA Group Holdings (Pty) Ltd (“NOA”) to deliver net zero energy solutions for Africa. 

The transaction will be financed through a mix of equity provided by AIIM’s South African IDEAS Fund and the latest iteration of AIIM’s USD denominated pan-African investment fund, AIIF4.

NOA is a vertically integrated energy platform that provides net zero oriented renewable energy solutions to customers in the commercial and industrial sectors of the economy. NOA has developed a comprehensive and innovative range of solutions for customers through the provision of large-scale wheeled energy generation utilising wind, solar and storage technologies. 

The investment strengthens AIIM’s position as one of the leading investors in South Africa’s renewable energy landscape with projects representing over 1.9GW of solar and wind generation capacity. It also supports the imperative to deliver new renewable energy capacity to address energy sector deficits and accelerate the energy transition. 

NOA aims to develop, finance and operate a portfolio in excess of 1GW of renewable energy assets over time.  Initial funding will be utilised to conclude the construction of existing projects and achieve financial close on projects amounting to almost 100MW. 

NOA will be launched by a team comprised of veterans of the South African renewable and commercial and industrial energy sectors and is led by Karel Cornelissen, the former Chief Executive Officer of Energy Partners.

The transaction comes as the liberalisation of South Africa’s energy markets is accelerated by impending regulatory changes which permit self-generation without the need for a generation license and the removal of size limits of such facilities, announced in July 2022 by President Cyril Ramaphosa.

These projects may now also be grid connected and sell to multiple customers through wheeling, the act of transporting electricity from a generator to a remotely located end-user through the use of an existing transmission and distribution system. Rapidly declining costs of renewable energy technology further enable NOA to provide its customers with renewable energy at competitive tariffs.

South Africa has a large, and growing, shortfall in energy availability. Between 30 and 50GW’s of new capacity is likely to be required over the next 10 years if South Africa is to meet its nationally determined contributions under the Paris Climate Agreement and to mitigate the current energy crisis. 

Ed Stumpf, Investment Director at AIIM, commented: “South Africa is at a pivotal point in the evolution of its energy landscape with the imminent retirement of ageing coal power stations, a significant energy sector infrastructure deficit and increasing liberalization of the market paving the way for an acceleration of investment in net-zero oriented businesses such as NOA.” 

Olusola Lawson, Managing Director & Co-Head at AIIM said: “We are excited by the amount of proprietary deal flow being generated by our next generation pan-African fund, AIIF4. The NOA commitment represents the fifth investment to date. AIIF4 is a thematic investor with a high-quality diversified pipeline across the digital infrastructure, energy transition and mobility and logistics sectors. We look forward to expanding the fund’s portfolio.”

AIIM will also seek to develop bolt-on investment prospects in other key African markets where it has portfolio investments and on-the-ground experience to ensure that NOA can establish itself as a regional energy solutions provider in key energy demand hubs across the continent. 

Karel Cornelissen, CEO of NOA commented: “We are excited to conclude this transaction and create a long-lasting partnership with AIIM. The acquisition allows NOA to rapidly scale up on our ambitions to partner with our clients on their journey to Net Zero, while at the same time making a contribution to South Africa’s current energy crisis.”