The Norwegian Investment Fund (Norfund) and the UK’s development finance institution (the CDC Group) have announced a R600 million investment in H1 Capital – a South-African black-owned and managed renewables investment and development company.
Norfund will be responsible for funding R360 million of the proposed deal, while the CDC will be responsible for the remaining R240 million, the groups said in a statement on Thursday (3 March).
The investment will fund a pipeline of over 2.4 GW of new wind and solar projects, generating approximately 6,400 GWh per year. This will contribute to avoiding annual emissions of 6,2 million tons of CO2 and help to accelerate South Africa’s transition to clean energy.
The transaction represents a joint vision by the two government-backed finance groups to mobilise climate finance to Africa and back clean infrastructure projects across the continent, Norfund said.
“The investment from Norfund and CDC, which will soon be renamed British International Investment (BII), will help to improve access to clean and affordable energy in South Africa. The increase in clean energy supply will provide consistent power to cities, villages, townships, businesses and farms, thereby increasing productivity and encouraging economic growth.”
“The investment in H1 Capital demonstrates a commitment by the UK and Norway to act on pledges made at COP26 – scaling climate finance to Africa and deepening collaboration on solutions that will meet the continent’s needs and address the climate emergency.”
At the summit, Norway announced the creation of a new climate investment fund to be managed by Norfund, and this capital to H1 Capital will be the first investment under the new fund.
The group added that South Africa has tremendous economic potential.
“The government has set an ambitious target to generate 20GW of new renewable capacity over the next decade to address power shortages and decarbonise the power generation fleet, where 86% the country’s energy mix is thermal.”