Swedfund and IFU have made commitments of $44m to Sturdee Energy, a South African independent power producer which develops renewable energy projects and related infrastructure across Southern Africa.
Swedfund and IFU, the Swedish and Danish DFIs, have committed $44m (€41.9m), a total of $22m each, in direct equity investments into Sturdee Energy, a South African independent power producer. The company develops, owns, operates and invests in renewable energy projects and related infrastructure across Southern Africa in support of economic growth and socio-economic development.
Speaking to Impact Investor, Jonas Kolijn, senior investment manager, said that Swedfund was attracted to the company because of its focus on renewables, as well as the expertise of its team and a well-developed near-term pipeline.
“Sturdee Energy has a strong pipeline of upcoming projects. This makes it a good fit for Swedfund as our strategic focus is to increase our direct equity investments in the energy sector, targeting high emitting developing countries and increasing the availability of renewable energy,” he said.
Growth plans
Sturdee Energy supplies energy to government utilities, large corporations, and industrial clients. The investment will be used to support the company’s growth initiatives and contribute to the acceleration of the green transition and the development of increased energy capacity from renewable sources across Southern Africa. The region faces a dearth of capital investment due to the perceived risk of investing into renewables there, according to the DFIs. Impact Investor recently reported on the challenges facing sub-Saharan renewable energy infrastructure assets due to the lack of a viable secondary market.
Andrew Johnson and James White, executive directors of Sturdee Energy, said: “At Sturdee Energy we believe alignment starts with a common view of the future, but goes beyond this to the agreement of each step in the path to realise this future. With IFU and Swedfund’s investment in our company, we welcome two investors who are willing to walk this path with us.”
Renewables pipeline
Swedfund confirmed that Sturdee Energy’s operational projects are currently 100% solar but that it will be expanding into wind projects in 2025, with a development pipeline that includes solar and wind energy as well as battery storage.
The company currently operates 31 megawatts (MW) of solar power in Namibia and Botswana and is constructing a further 20MW of solar power in South Africa. It is also advancing a portfolio of more than 200MW, of both wind and solar, to financial close across Botswana, South Africa and Namibia as well as a fourth country which Swedfund said could not be disclosed. These new wind and solar power plants will generate more than 600 gigawatt hours of renewable energy and reduce CO2 emissions by nearly 500,000 tonnes per year once operational, which they are scheduled to be by 2026.
Together Swedfund and IFU have also developed an environmental and social action plan to strengthen the work around human rights and labour standards throughout the lifecycle of Sturdee Energy’s projects and while the DFIs remain active investors.
