Investor demand growing for Africa’s green transition, says Richard Abel

Africa Satellite image at night

Managing director of UKCI says time is right for first African renewables yieldco.

UK Climate Investments (UKCI) has established a first dedicated renewable energy ‘yieldco’ in Africa with an investment of £25m.

Richard Abel, the managing director of Macquarie-supported UKCI, has explained why now was the right time: “UK Climate Investments has now been investing in sub-Saharan Africa for over three years. During that time, we’ve seen a significant growth in the appetite of investors looking to be part of this fast-developing region’s green transition.”

A ‘yieldco’ is a company created to own operating assets that produce a predictable cash flow through long term contracts. Richard Abel sees this step as an indicator of where African renewable investment is heading.

“The establishment of Revego Africa Energy is another sign of the growing maturity of the market, and an indication that the future of green finance in sub-Saharan Africa will be bright,” he explained.

This year, UKCI has also marked the delivery of its latest project in South Africa – Kruisvallei Hydro – a hydropower facility which was part-financed alongside majority black-owned renewable energy investor, H1 Holdings.

Richard Abel, who will be sharing his insights into sustainable infrastructure at the upcoming Global Infrastructure Conference, commented on the wider social effect of getting such renewable investments right. 

“In addition to supporting South Africa’s low carbon transition by providing enough clean electricity to power nearly 200,000 homes per year, these projects have delivered opportunities for employment, skills development, and investment in rural communities across the region,” he said.

The new fund will be managed by another majority black-owned fund manager, Revego Fund Managers, which has a high level of experience in sustainable investments.

Revego Africa Energy Limited CEO, Reyburn Hendricks, commented: “The renewables sector is at an important point in its growth in South Africa and the rest of sub-Saharan Africa. The portfolio already consists of a number operational, income-earning renewable projects, with further opportunities identified in a growing pipeline.”