Norfund, CDC invest US$39m in 2.4GW of South African renewables

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The development funds said the investment would support South Africa in achieving its climate goals. Image: Scatec

Norway’s Norfund and UK development finance institution CDC have teamed up to fund 2.4GW of renewable deployment in South Africa through a ZAR600 million (US$39 million) investment in renewables company H1 Capital.

Norwegian state-owned investment fund Norfund is providing ZAR360 million (US$23.4 million) while CDC, soon to be renamed British International Investment (BII), has made ZAR240 million (US$15.5 million) available.

Norfund said the investment would support South Africa’s clean energy goals and enable H1 Capital to fund the development of 2.4GW of solar and wind projects, generating 6,400GWh a year.

H1 Capital was selected because of its “expertise on several renewable power projects and its deep commitment to energy sustainability,” said Norfund, which is investing in H1 Capital via Norway’s new climate fund announced at COP26 late last year.

“I am confident that this first investment under the new climate mandate will be the first of many mutually beneficial partnerships that contribute to a just transition in South Africa and in the other markets that Norfund aims to prioritise,” said Norwegian Minister of International Development, Anne Beathe Tvinnereim.  

The UK’s Minister for Africa, Vicky Ford, said the US$16 million of investment in H1 Capital “demonstrates our continued commitment to remaining a strong partner for Africa”.

“Investments like this reaffirm and follow on from the commitment we have made to South Africa’s low-carbon transition through the US$8.5 billion multi-donor Just Energy Transition Partnership,” added Ford.

The Just Energy Transitions Partnership was announced in November and sees the UK, US and the EU create a new vehicle to support and accelerate the decarbonisation of South Africa’s economy, with a particular focus on the electricity system.

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