Mahlako Energy Fund, Mergence and Third Way Investment Partners, conclude a funding deal in Aventro, to enable its investment in the 100 MW Redstone CSP project. The funding support brings together a women-led investment team, orchestrated by Mahlako Financial Services, advancing one of the most innovative funding packages in the sector to Aventro, one of the fastest growing industrialists in the energy sector.
The investment partnership comprises three private fund managers with a strong industry track record, investing in game-changing and impactful energy infrastructure projects, coupled with sound environmental, social and governance (ESG)-driven impact investing to deliver risk-adjusted returns on behalf of investors.
“We are delighted to back Aventro, who are active participants in the project, both as a local shareholder and partner involved in the development, procurement, and construction. As Mahlako, we are proud to have led a 100% women-driven transaction, collaborating with Mergence and Third Way, bringing three like-minded investors with a core strategy to facilitate socio-economic development reflected in funding new power generation capacity.” said Makole Mupita, Principal of the Mahlako Energy Fund.
Mahlako Financial Services’ innovative approach to how it deploys its capital pioneered investments in the wheeling space – initially in the country’s first wheeling project to come into operation as well as the country’s largest PPA under the amended Electricity Regulations. Its strict adherence to ESG principles bagged the business the 2022 ABSIP Best ESG Strategy Award.
Mergence has invested circa R2,5 billion in 14 renewable projects since 2010, with a combined generation capacity of 600 megawatts (MW). It has been a trailblazer in ESG impact investing, detailing the social and economic benefits of its investments in the firm’s annual impact report over the decade.
Its fund of funds approach has a multiplier effect, having backed black female led fund managers, and co-investing alongside them. Third Way’s Fund of fund model also enables domestic retirement funds of all various sizes seamless access to diversified exposure to this growing asset class. Third Way has a proven investment track record and its R3,5 billion Infrastructure Debt Fund 1 has exposure to more than 30 renewable projects. The fund has provided investors stable real returns since its inception, and has benefitted some of the poorest communities in SA.
Aventro Investments is a black-owned investment company with extensive experience in the fields of smart proprietary technologies in the energy sector. Aventro has a diversified investment strategy with interests in the mining, property and agriculture sectors as well.
The financing will boost Aventro’s shareholding participation into the first of its kind 100MW molten salt solar thermal power project to be developed in Africa, which will operate at full capacity for 12-hours in the absence of solar irradiation, empowering the organization and the project to reach its targeted completion date.
Commenting on the investment, Tshepiso Appie, Investment Associate at Mergence “The investment into Aventro, accelerates the development of renewable energy capacities, while adding much needed dispatchable energy during peak. We are excited to conclude this transaction alongside Mahlako and Third Way to create a long-lasting partnership.”
Located in the Postmasburg, Northern Cape Province, the plant will deliver clean and reliable electricity to 200,000 households around the clock. It forms part of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).
Elaborating on the deal, Fulu Makwetla, Managing Director of Third Way Investment “We want to seize the moment in contributing to a stable energy supply and a more sustainable future. It’s precisely these types of projects that we need to be looking at to meet the country’s energy demand. With an energy crisis on our hands, an opportunity is presented to us to provide solutions, and we are proud to have done so with like-minded investors.”
The anticipated project completion date is 2023 and is expected to have an operational life of more than 30 years.
”We are delighted to have the funding from Mahlako, Mergence and Third Way enabling our journey and vision of becoming one of the largest diversified investment holding companies in our chosen sectors” added Tebogo Nkosi of Aventro Investments.
This investment is testament to the fact that with innovative funding models, sustainable partnerships and a commitment to the energy sector transformation, more black industrialists can be unearthed who can actively and meaningfully participate in contributing to the country’s 35GW requirement, to ultimately drive sustainable and inclusive growth.
