HomeIndustry SectorsFinance and PolicySouth Africa's first, specialised, private equity clean technology fund raises $US94 Million

South Africa’s first, specialised, private equity clean technology fund raises $US94 Million

Vincent Tchenguiz,
8 June 2010 – South Africa’s first, specialised, private equity clean technology fund, Evolution One Fund (“Evolution One”), has reached its Final Closing milestone having raised ZAR700 million ($US94 million) in capital from local and foreign investors, including supranational and sovereign wealth funds. This capital will be dedicated to equity investments into a suite of clean technology projects and enterprises including new energy and environment focussed technologies located in South Africa and across Southern African Development Community (“SADC”) countries.

Consensus Business Group (”Consensus”), the London-based advisor to a Family Trust, has played a leading role in establishing and advising the fund and, as founding cornerstone investor, has secured the involvement and participation of seven other leading international organisations.

Vincent Tchenguiz, Chairman of Consensus said:

“We have extensive experience and a long track record in global clean technology investing and this has given our partners the confidence to join with us in setting up Evolution One in South Africa. We are delighted to have successfully achieved Final Closing of this ground breaking fund.”

Consensus is joined in the Evolution One partnership by IFC, a member of the World Bank Group; the Finnish Fund for Industrial Cooperation (“Finnfund”); the Swiss Investment Fund for Emerging Markets (“SIFEM”); Global Energy Efficiency and Renewable Energy Fund (“GEEREF”), a compartment of the European Investment Fund; the African Development Bank (“AfDB”); the Norwegian Investment Fund for Developing Countries (“Norfund”); and the Industrial Development Corporation of South Africa (“IDC”).

Evolution One’s investment strategy centres on long-term equity and equity related investment based on active management and post-investment value addition. The local South African fund advisor, Inspired Evolution Investment Management (“IEIM”), aims to support and guide target invested companies and provide long-term capital growth. Expansion capital investments are prioritized although the fund will consider earlier stage environmental infrastructure projects with clear evidence of early revenue streams and profitability. The fund will also invest into proven technology or projects that are able to clearly demonstrate market adoption. The fund’s minimum investment size is ZAR10 million ($US1.4 million) and its maximum investment is ZAR100million ($US14 million) into any one project or technology.

Vincent Tchenguiz added:

“Evolution One Fund is the first dedicated clean technology private equity fund to be established for Africa and its value proposition is to bring Consensus’s active financial modelling and specialist insights together with expertise to projects and technology enterprises in South Africa and the SADC region. In addition, the investment capital of this network of leading investment institutions inherently leverages access to specialised knowledge and skills in the broader global clean technology sector. The Fund is advised by a fund management team comprising nine principals and analysts who collectively bring their unique breadth and depth of commercial, financial and sustainability credentials. This is combined with strong black empowerment credentials and the ability to structure broad based black economic empowerment transactions.”

Evolution One Fund is a ten-year fund and is committed to making investments into clean technologies in the new energy and environmental sectors, which include cleaner energy generation such as wind and solar energy, and energy efficiency, cleaner production and more efficient manufacturing processes, air quality and emissions control, water quality and resource management, waste management, agribusiness, natural products and materials and related services for sustainable buildings.

Michael Brooks, CEO of IEIM, noted that to date the fund management team has appraised numerous deal opportunities and that an announcement would be made within weeks providing details of the first three investments to be undertaken by the fund. He commented:

“In the past two years we have seen significant positive shifts in the commercial thinking underpinning the roll out of clean technology projects and enterprises, both within the public and private sectors.

“The South African government’s recent adoption and implementation of the Renewable Energy Feed-in Tariffs (“REFIT”) and Co-Generation Feed-in Tariffs (“COFIT”) are evidence of the state’s support for regulatory drivers to underpin the development at scale of commercially viable renewable energy projects here and in our neighbouring countries. We are currently actively engaging with a range of promoters of clean technology enterprises and with developers of renewable energy projects.”