A renewable energy investment vehicle, Revego Africa Energy Limited (Revego), has announced a R1.25 billion bridging facility with Investec Bank, aimed at bringing the vehicle to market.
The bridging facility will allow Revego to continue to fund its investment activity in acquiring a portfolio of operating renewable energy assets in sub-Saharan Africa, ahead of its planned listing on the Johannesburg Stock Exchange, expected to take place in the first quarter of 2020.
Mike Meeser, CIO of Revego Fund Managers, a majority black-owned and managed firm which will manage the fund, says Revego is already making significant progress in building up the portfolio.
“We have signed purchase agreements for two assets already and we’re in an advanced stage on four others,” he says. “Our plan has been to proceed with the listing once we had sufficient quality assets with an approximate value R1.75 billion in the portfolio and this bridging facility is a critical step towards achieving this goal.”
Revego’s goal is to have an initial fund size of between R1.75 billion and R2.2 billion at listing. Meeser states that the long-term goal is to increase the fund’s size over the medium to long term with further equity raises.
“This will facilitate acquisitions of equity in operating renewable energy assets as the sub-Saharan African market continues to embrace renewable energy technologies,” says Meeser.
Investing into a lower-carbon future
The Revego investment case suits investors seeking a stable, inflation linked yield in the renewable energy space in South Africa and the rest of sub-Saharan Africa, argues Meeser.
“With electrification as a key goal in sub-Saharan Africa, the renewables space has an important role to play in realising the growth and development goals in the region in a sustainable, climate-friendly way” he adds. “This will suit investors seeking to make their investments contribute to a lower-carbon future while also earning an attractive return.”
Andre Wepener, head of power and infrastructure finance at Investec Bank in Johannesburg, explains the purpose of the bridge facility; “Investec Bank is proud to support the listing of the Revego Fund by providing this bridge loan facility. The proceeds of the facility will be utilised to acquire assets ahead of the listing, providing the early investors with certainty of the initial asset portfolio.”
Revego was launched at the beginning of this year with Investec Bank and UK Climate Investments (UKCI) as cornerstone investors.