Norway’s Climate Investment Fund and pension giant KLP are investing NOK 850 million ($80 million) in South Africa’s renewable energy sector through a new platform, Anthem.
The initiative is expected to become one of the country’s largest clean power players, with plans to develop 11 GW of capacity.
Anthem was formed from the merger of African Clean Energy Developments (ACED) and EIMS Africa.
Eric Nasby, Investment Analyst at KLP, said the deal offers both financial returns and clean energy gains for South Africa.
“We firmly believe that the investment will generate a good return for KLP’s owners, while also helping to increase the production of renewable energy in South Africa”, Nasby said.
The platform is also joined by Mahlako Energy Fund, a Black women-owned South African investment firm.
It will oversee a 2.7 GW portfolio across 17 operating projects, in addition to ventures under construction and financing.
The Climate Investment Fund, managed by Norwegian development finance institution Norfund, is contributing NOK 685 million ($64 million).
KLP Norfund Invest, a joint investment vehicle, is adding NOK 170 million ($16 million).
According to the International Energy Agency, more than 80% of South Africa’s electricity comes from coal.
However, the country has been making strides toward a climate transition, particularly in solar energy.
Recently, it announced plans to allow private solar companies to purchase electricity from the state utility, Eskom.
Renewables gains further momentum in South Africa
The investment is part of Norway’s broader strategy to accelerate the global energy transition.
In May 2022, Norfund announced that the Climate Investment Fund was operational after being established in December 2021.
South Africa was selected as one of eight target countries, alongside India, Vietnam, the Philippines, Cambodia, Indonesia, Sri Lanka and Bangladesh.
Norfund CEO Tellef Thorleifsson said the fund is open to future investments in countries where it can achieve strong climate impact with trusted partners.
The Climate Investment Fund will be capitalised with NOK 2 billion (US$209 million) annually for the next five years.
Investments will focus on renewable energy production, development, and battery storage.
The fund will mainly invest in equity with a 20% to 35% ownership stake, and individual deals are expected to range between $50 million and $150 million.
Other developments
Meanwhile, Norwegian renewable energy company Scatec ASA has secured financial close for the second 60 MW phase of the 120 MW Mmadinare Solar Complex in Botswana.
The expansion, valued at BWP 1.5 billion ($109 million), will proceed with Scatec as the engineering, procurement, and construction (EPC) contractor.
It will also act as the asset manager and operations and maintenance service provider.
Financing for the project includes BWP 1 billion in non-recourse debt from First National Bank of Botswana and the World Bank’s International Finance Corporation (IFC).
The remaining costs will be covered by equity from Scatec.
The new project is expected to deliver significant emissions reductions as the country pushes to diversify its energy mix.
