African Infrastructure Investment Managers (AIIM), one of Africa’s largest infrastructure-focused private equity fund managers, today announced a substantial additional equity and preference share investment to support the merger of existing portfolio company Starsight Energy with South Africa-based solar firm, SolarAfrica Energy.
The newly combined strength of Starsight Energy and SolarAfrica Energy will make it one of the continent's most dominant solar players - a genuine pan-African provider of competitive, full-service renewable energy and energy efficiency solutions to the continent's commercial and industrial (C&I) sectors.
AIIM recently pledged to increase its pipeline of renewable energy investments in South Africa from 2,000MW to 5,000MW in the next three years. Alongside its original investment in Starsight Energy announced in 2018, AIIM has further committed c.ZAR1.25 billion [approximately USD73 million] equity and shareholder funding to the South African subsidiary of the merged entity. This will accelerate the build-out of the contracted pipeline in the C&I wheeling market in South Africa, providing green energy and certainty of pricing to large C&I customers.
Olusola Lawson, Managing Director and co-Head at AIIM, said: “Our support for the merger demonstrates our confidence in the growth potential of full-service renewable energy companies in Africa. This is a landmark moment for cross-continent green and modern energy and a significant step forward in Africa's energy transition. As one of Africa’s largest renewable energy equity investors, and with a renewable energy portfolio of c.2GW, AIIM has been privileged to play a key role in the growth and expansion of the Starsight platform over the last five years. The additional equity and loan funding extended through our IDEAS Infrastructure I Partnership will empower the merged entity to boost the supply of reliable solar energy and we look forward to supporting this continued growth.”
The merger - announced last week - is subject to standard regulatory approvals including anti-trust approvals. Once approved, the merged entity will comprise a portfolio of over 220MW of operated and contracted generation capacity and 40MWh of operational battery storage, with an additional generation pipeline exceeding 1GW, spanning three key geographical hubs – Southern, East and West Africa.
Thor Corry, Investment Director at AIIM, said “The newly merged company is perfectly positioned to contribute to solving South Africa’s current load-shedding issues which result in regular blackouts across the country. SolarAfrica is already a significant provider of energy in South Africa but will build on this heritage, constructing new utility scale generation facilities and wheeling electricity over the country’s existing power grid to bring cost savings, carbon reduction and power security to its commercial and industrial customers.”