Hybrid Equity, a division of Old Mutual Alternative Investments (OMAI), has invested an additional R420m to increase its stake in renewable energy developer Mulilo.
Hybrid Equity has been a shareholder in Mulilo since 2015 when it invested R120m to take a stake in the company. It injected another R380m in 2020 to further boost its investment. The transaction is part of OMAI’s broader goal of accelerating SA’s transition to a cleaner and more climate-conscious energy system.
While Hybrid Equity did not disclose the size of its stake in Mulilo in the transaction announcement on Tuesday it said it may boost the scale of its investment in future.
“SA still requires a significant amount of renewable energy generation to meet the targets in the proposed just transition framework,” said Hybrid Equity co-head Mujaahid Hassan, adding that this investment represents one step closer to meeting this target.
Mulilo, which was founded in 2008, has a strong focus on wind and solar technologies, and also develops, builds, owns and operates large-scale renewable projects throughout SA.
It has been awarded more than 420MW worth of projects in SA’s Renewable Energy Independent Power Producer Programme (REIPPP) and has also won projects in the Independent Power Producer Risk Mitigation Programme.
Hassan said while the REIPPP programme is not without its faults it has been largely successful in attracting independent power producers (IPP) to invest in SA’s power mix, having closed bidding rounds under competitive circumstances between 2011 and 2021.
The latest and fifth bid window awarded 25 projects to IPPs who will jointly invest about R50bn in projects that are expected to deliver a combined 2,583MW of renewable energy to SA’s grid.
“There remains significant international interest in the REIPPP programme, and it continues to attract various forms of capital,” said Hassan.
“Despite the various bid windows to date, SA still requires a significant amount of renewable energy generation to meet the targets in the proposed just transition framework which is intended to address some of the challenges faced as well as seize the opportunities presented by SA’s current reliance on fossil fuels.”
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