The financing will support the development of three renewable energy projects in South Africa being developed by H1 Holdings
Image: UKCI to invest in South African renewable energy projects. Photo: Courtesy of Green Investment Group.
UK Climate Investments (UKCI) has signed an agreement with H1 Holdings to provide £14m (ZAR253m) financing to support the development of clean energy projects across South Africa, totaling 254MW of capacity.
Founded in 2000, H1 Holdings is a renewable energy developer. As part of the agreement, UKCI’s funding will support HI for the development of several clean energy projects.
The projects include the Kruisvallei Hydro project in the Free State province with 4MW capacity, the Kangnas wind farm in the Northern Cape Province with 140MW capacity and the 110MW Perdekraal East wind farm in the Western Cape Province.
UKCI managing director Richard Abel said: “Over 90% of electricity generation capacity in South Africa currently relies on fossil fuels. Our partnership with H1 Holdings supports the country’s transition to a new energy mix – promoting cleaner growth in southern Africa’s largest economy whilst stimulating economic development in rural areas and supporting increased BEE participation in the renewables sector.”
UKCI will provide financing through a new funding mechanism
The financing will be offered through a new funding mechanism developed by UKCI, which is claimed to support Black Economic Empowerment (BEE) entities.
Expected to be completed by the end of next year, the projects will generate enough clean electricity to power nearly 200,000 South African homes, while helping to avoid nearly 844,000 tonnes of greenhouse gas emissions annually.
H1 Holdings CEO Reyburn Hendricks said: “H1 Holdings is proud to be working with UK Climate Investments on promoting access to cleaner electricity in southern Africa. Energy is a highly capital-intensive industry and access to finance is a challenge across the industry for all players.
“Our partnership will help to address the need for new generation capacity in South Africa.”
The financing to H1 Holdings marks the second investment of UKCI in Sub-Saharan Africa and it is its fifth investment in total.
UKCI is a joint venture between the Green Investment Group and the UK Government’s Department for Business, Energy and Industrial Strategy.