Dr. Patrice Motsepe’s African Rainbow Energy and Power (AREP) and Absa launch African Rainbow Energy as a Leading Independent Renewable Energy Platform in South Africa

African Rainbow Energy and Power (AREP) and Absa today launched a new entity called  African Rainbow Energy as an African-led, world-class, renewable energy investment  platform. 

AREP will make an initial investment of assets covering wind, solar photovoltaic and biomass projects with an installed capacity of more than 700 megawatts of renewable  energy. Absa will make an initial investment of R500 million in cash and transfer R5 billion  of its existing renewable energy assets to African Rainbow Energy. This will result in  African Rainbow Energy having approximately R6.5 billion of gross assets, covering 31  renewable assets, making it one of the largest and most diverse independently owned  energy businesses in South Africa. 

The establishment of African Rainbow Energy expands the pool of funding available for  renewable energy developments in South Africa, at a time when the country is  accelerating its plans to expand and diversify its energy base through the Renewable  Energy Independent Power Producer Programme (REIPPP). The private sector is  simultaneously expanding its energy supply. This is an important step for the South  African economy, which aims to source reliable and cost-effective renewable energy to  drive growth and employment.

This collaboration supports AREP’s objectives to utilise modern and renewable energy  technologies to provide affordable electricity in South Africa and on the African  continent. Absa is uniquely positioned given its key role in the African continent’s economy and its commitment to the development of renewable energy and the green  economy. Absa is a leading funder into the renewable energy market and this transaction  expands its participation in this important sector.  

“Renewables have been one of the most successful asset classes globally offering a  unique mix of attractive long-term, inflation-linked returns and growth providing significant  scope to deploy further funds. African Rainbow Energy is engaging with other investors  to increase its equity base and fund further growth with the aim of listing on the JSE in  future,” said Brian Dames, African Rainbow Energy Chief Executive Officer. “African  Rainbow Energy is uniquely positioned to access these investment opportunities given  its track record for competence and delivery, its unique network of entrepreneurs and its  partnership with entities that have a history of empowering women, youth, rural and urban  communities.” 

African Rainbow Energy will invest in renewable technologies including solar, wind, and  battery energy storage solutions. It has already secured a deep investment pipeline and  has partnered on a number of bids into Round 5 of South Africa’s highly successful  REIPPP.  

African Rainbow Energy will also invest in the private power sector and is working with  several companies on bespoke energy solutions. 

“Our participation in African Rainbow Energy underscores Absa’s commitment to support  renewable energy development and enhance the green economy, as part of our  sustainability agenda,” said Jason Quinn, Absa interim Group Chief Executive.  “Renewables are an important part of Absa’s sustainability strategy and we target 

financing or arranging more than R100 billion for environment, social and governance related projects by 2025.”

Absa not only brings capital to the initiative, but also expertise and experience in  renewable energy financing. It is at the forefront of financing renewable energy in South  Africa, having funded 33 projects to date, representing approximately 3 gigawatts, which  amounts to 46% of the total projects closed to date in South Africa. Absa’s renewable  energy loans amounted to R20 billion at 31 December 2020.  

Dr Patrice Motsepe said “approximately 15 years ago we set out to create a world class  African energy company that would provide investors with predictable and growing  returns from a clean energy portfolio of environmentally responsible assets. This energy  company would also contribute to the growth of the South African economy and the  economies on the rest of the African continent while improving the living conditions of the  poor, unemployed and marginalised. Absa is a like-minded partner that shares our vision  of building this initiative at scale in Africa.” 

AREP’s holding company, Ubuntu-Botho Energy Holdings Proprietary Limited was  founded by Dr Patrice Motsepe and is the only African company that is a partner in the  Breakthrough Energy Ventures which was started by Bill Gates and includes several  globally respected leaders including Jeff Bezos, Richard Branson, Jack Ma, Mukesh  Ambani and others. Breakthrough Energy Ventures is an investor-led fund that is building 

new, cutting-edge companies that aim to provide energy with zero emissions. 

“Our investment in African Rainbow Energy creates an opportunity for Absa to increase  our role in the much-needed expansion of the renewable energy sector,” said Quinn.  

“The fund will provide investors with exposure to utility-scale, commercial and industrial  sector clean-energy investments, building a platform of scale in South Africa, and will  seek selected, bankable projects in Africa,” said Dames. 

The effective date of the fund is subject to the fulfillment of certain conditions precedent, which are expected to be concluded in the fourth quarter of 2021.

About AREP 

AREP is an African energy company focused on clean energy solutions including  renewables, hydro, gas and complementary transmission investments. One of AREP’s  main objectives is to provide affordable energy solutions in South Africa and on the  African continent through the utilisation of modern and renewable energy technologies. 

AREP’s holding company, Ubuntu-Botho Energy Holdings Proprietary Limited was  founded by Dr Patrice Motsepe and is the only African company that is a partner in the  Breakthrough Energy Ventures which was started by Bill Gates and includes several  globally respected leaders including Jeff Bezos, Richard Branson, Jack Ma, Mukesh  Ambani and others. Breakthrough Energy Ventures is an investor-led fund that is building  new, cutting-edge companies that aim to provide energy with zero emissions. 

AREP’s diversified portfolio of clean energy projects in South Africa, includes investments  of more than 700 megawatts with geographic spread and technology diversification.  AREP is the largest shareholder in the SOLA Group (www.sola.africa) a leading player in  the South African commercial and industrial solar market. 

AREP is well positioned and continues to source attractive investment opportunities in  the local and African market. 

AREP is committed to a long-term investment strategy as owner and operator of energy  assets.  

About Absa Group Limited 

Absa Group Limited (‘Absa Group’) is listed on the Johannesburg Stock Exchange and is  one of Africa’s largest diversified financial services groups.  

Absa Group offers an integrated set of products and services across personal and  business banking, corporate and investment banking, wealth and investment  management and insurance.

Absa operates in 14 countries. The Group owns majority stakes in banks in Botswana,  Ghana, Kenya, Mauritius, Mozambique, Seychelles, South Africa, Tanzania (Absa Bank  Tanzania and National Bank of Commerce), Uganda and Zambia and has insurance  operations in Botswana, Kenya, Mozambique, South Africa and Zambia. Absa also has  representative offices in Namibia and Nigeria, and securities entities in the United  Kingdom and the United States. 

For further information, please contact Lisa Nery on 060 891 1126 or  lisa.nery@arep.co.za

For Absa-related queries, please contact Carli Cooke at 083 652 7371 or  carli.cooke@absa.africa 

Related Blogs