Johannesburg, 2 June 2022 – Mahlako Energy Fund has concluded its investment in a landmark industrial independent power generation project for the Harmony-commissioned 30MW solar photovoltaic (PV) portfolio. This project is one of the first under Schedule 2 of the Electricity Regulation Act of South Africa. The amended regulations allow for investment in new generation capacity of up to 100 MW per license.
The investment facilitates one of South Africa’s largest solar PV plants and the biggest Power Purchase agreement (PPA) for commercial and industrial private offtake to date, further advancing Mahlako’s vision of progressing the just transition and transformation of the country’s energy sector.
Located in the Free State near Odendaalsrus in the Welkom area and feeding energy into Harmony’s operations, the three power facilities are expected to deliver 68GWh in the first twelve months to Harmony mining operations when fully operational and mitigate 65,000 tonnes of carbon dioxide equivalent per year.
“This project is further testimony to Mahlako’s commitment to energy security and sustainable investments, while providing superior returns for our investors. The Fund already completed an investment into the first operational energy wheeling project in South Africa, and now into the biggest PPA under the new 100MW regulation, further displaying the innovative approach taken by the Fund in deploying its capital” said Makole Mupita, Principal of the Mahlako Energy Fund.
The Fund, managed by Mahlako Financial Services has invested alongside African Infrastructure Investment Managers (AIIM)’s IDEAS Fund, and Rand Merchant Bank as debt arranger.
Commenting on the transaction, Sean Friend, Investment Director at AIIM and co-portfolio manager of the IDEAS Managed Fund, said, “We are excited to conclude this transaction and create a long-lasting partnership with Harmony and Mahlako. This portfolio further entrenches IDEAS as the leading investor in the commercial and industrial private power market. We look forward to pursuing additional investments in this sector.”
The importance of stable energy supply for the survival of the mining sector was highlighted at the Mining Indaba. This project therefore has the potential to sustain and create many jobs, thus the timing of the project is crucial.
Meta Mhlarhi, Principal of the Mahlako Energy Fund emphasises, “As a Fund, we will continue to harness the expertise of our team, which is 100% black-owned, and their drive to consistently deliver excellence to empower and increase the involvement of black participants and women in the energy sector. Facilitating economic transformation and contributing to the country’s development roadmap remains a key driver for our Fund.”
The construction phase is anticipated to commence in June 2022, with the first energy delivered onto the grid in March 2023. The project is expected to produce 1.3TWh of energy over the 20-year lifespan of facilities.
“Further to our Environmental Social Governance (ESG) principles enshrined in our investment process, we actively seek out opportunities that contribute towards South Africa’s clean energy goals“, adds Mitesh Pema, Principal of the Mahlako Energy Fund.
Since its inception, the Mahlako Energy Fund has been geared towards playing a leading role in the progression of South Africa’s energy security. Driven by the belief that significant growth requires energy, the Fund, through its growing portfolio and pipeline, serves as a driving force in steering the energy sector in the right direction.
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About Mahlako a Phahla
Mahlako Financial Services is a 100% owned subsidiary of Mahlako a Phahla Investments and is a South African alternative investments fund manager that seeks to invest in developmental assets. It is 100% Black women owned company and a level 1 BBBEE company. Mahlako invests in developmental infrastructure assets that are geared towards transforming our economy while also providing innovative and insightful solutions to our clients.
About Mahlako Energy Fund
The Mahlako Energy Fund is a discretionary managed fund, with a target size of R1,75 billion at closing, investing in projects and businesses in the energy value chain focussing on renewable energy, gas, and energy services.