Black women-owned fund manager Mahlako Financial Services, which recently built a solar plant for US technology group Amazon Web Services (AWS) in the Northern Cape, plans to open another fund to invest in developmental infrastructure projects.
The company, a subsidiary of Mahlako A Phahla Investments group that was founded by sisters Makole Mupita and Meta Mhlarhi in 2009, launched a R1.5bn energy fund early this year.
Apart from the AWS project, the fund is also involved in a green hydrogen project in Prieska in the Northern Cape. It plans to expand by opening another fund in the coming years that will target other infrastructure projects.
“The AWS project, which was completed ahead of schedule, proves that we can deliver on these projects that have massive returns and facilitate economic transformation,” said Mupita.
The sisters, both chartered accountants, have experience in private equity, asset management and advisory, with Mupita having previously been a portfolio manager at Old Mutual’s Infrastructure Development and Environmental Asset Fund.
The Mahlako Energy Fund (MEF) is managed by Mahlako Financial Services. Mupita said the investment company wants to be part of the growth of the South African infrastructure industry that will lead to economic transformation.
Mahlako is also keen to participate in the “just transition” programme, which has a $8.5bn (about R130bn) commitment from the US, the UK and other countries. The commitment is aimed at helping SA transition to clean energy.
SA is the world’s 12th-biggest emitter of greenhouse gases and relies on coal for more than 80% of its power. The transition to clean energy will include investments in renewable projects and areas such as electric vehicles and green hydrogen.
“With the recent announcement by the South African government at COP26 to accelerate investment in renewable energy and other sectors, we are committed to contributing towards SA’s just transition goals to using cleaner forms of energy,” said Mhlarhi, who is the fund principal of the MEF and executive director of Mahlako Financial Services.
Last week, the MEF announced the commercial launch of the 10MW AWS solar plant in Khathu, which will supply renewable energy to AWS data centres.
The solar project is expected to generate up to 28,000MWh a year, which is equivalent to the annual electricity consumption of more than 8,000 average South African homes.
Mupita says the AWS project uses technology that has never been used in SA before. The solar photovoltaic panels track the sun throughout the day, absorbing irradiance from the sky and reflected light from the ground.
AWS said in a statement the facility will avert the emission of more than 25,000t of carbon annually, the equivalent of removing 5,400 cars from the road for a year.
“We want to transform the energy sector and the infrastructure sector as a whole as we believe we can’t grow South Africa without improving infrastructure,” said Mupita.
Mahlako owns 45% of the solar project.
“Historically, black women have been critically underrepresented in infrastructure, agriculture and utility ownership. Energy projects that enable black investment are our surest way to a just transition to renewable energy,” said Mhlarhi.
Mupita said raising funds remains a challenge but as the market for renewable energy opens up more, she hopes that funders will follow.
Simon Nicholas, energy finance analyst at the Institute for Energy Economics & Financial Analysis, said recently that funding like that announced at COP26 could help to attract further private investment in South African companies, accelerate the development of new technologies and drive down the cost of green technologies.
“This could clearly be of huge benefit to South Africa given the economy’s current dependence on unreliable coal-fired power plants producing power that is increasingly expensive for consumers. Actions that accelerate the energy transition are a boost to the economic outlook and hence a boost to the employment outlook,” he said.
During construction the AWS project created 167 jobs.
“The project contributed to the province’s economic development during the building phase and will over its lifetime sustain permanent jobs in electrical maintenance, operation and security,” said Mhlarhi.
Globally, Amazon has ambitious plans to cut its carbon footprint and aims to be using only renewable energy to power its operations within four years.
According to the company, last year it became the world’s largest corporate purchaser of renewable energy, with 65% of its energy needs — 10GW — met by more than 230 renewable energy projects around the world.
In addition to investing in energy projects, Mahlako also provides advisory services to the government. The company also has two 75MW solar project in De Aar in the Northern Cape.
