Vantage GreenX, an acronym for Green Electricity, was established to play a meaningful role in the South Africa’s energy sector with a total commitment of R2.2 billion ($215m) so far raised from a number of leading South African pension funds and managed by an experienced Vantage team, an official statement read.
The fund seeks to capitalise on three major trends including, the continued commitment of the South African government to reducing the country’s carbon footprint through the rollout of a large-scale renewable energy program, regulatory pressures such as Basel III which encourages banks to sell-down their long-term debt exposures, and expansion of African infrastructure, in particular energy infrastructure, to support sustainable economic growth.
As part of the country’s broader initiative to diversify the country’s energy mix, 17,800MW of new capacity expected on-board by 2030 will come from renewable energy sources, according to the Integrated Resource Plan.
Luc Albinski, the Managing Partner of Vantage Risk Capital said: “In 2012, renewable energy accounted for less than one percent of South Africa’s energy mix; Frost & Sullivan forecasts this will grow to 12 percent in 2020. Renewable projects are typically 70-80 percent debt funded so the renewable sector represents a massive opportunity for an alternative debt-oriented investor like Vantage.”
The Vantage GreenX Fund will launch with 7 project investments in its carefully vetted portfolio comprising of both solar and wind projects from a variety of suppliers and sponsors.
Vantage Capital currently manages 2 mezzanine debt funds with total commitments of approximately R2.85 billion ($279m). The GreenX Fund will bring funds under management at Vantage to over R5 billion ($489m).