Image: Solar Power Portal
Clean energy solutions company African Rainbow Energy and Power (AREP) has partnered with Absa, the South-African based financial services group, for the launch of one of South Africa’s most diverse privately owned energy businesses – African Rainbow Energy (ARE).
Established with the aim of enhancing the availability of funding for renewable energy developments, ARE will center around solar, wind and battery storage to significantly improve access to electricity country wide, increase private sector participation, and spur socio-economic growth.
Under the terms of the partnership, ARE’s gross assets will total R6.2 billion across 31 renewable assets, with Absa investing an initial R500 million along with the transfer of R5 billion of current assets and AREP transferring 700MW of assets regarding solar, wind and biomass to the newly launched company.
“The private sector is simultaneously expanding its energy supply. This is an important step for the South African economy, which aims to source reliable and cost-effective renewable energy to drive growth and employment,” stated the companies in a joint statement.
The launch of the company comes at a time where South Africa is aggressively pursuing increased investment in its renewable energy sector, with crippling electricity shortages restricting economic development and growth. With a secured investment pipeline already established, ARE will invest in renewable technologies while “providing investors with insight into utility-scale, commercial and industrial sector clean-energy investments,” stated Brian Dames, ARE Chief Executive Officer.
“Renewables have been one of the most successful asset classes globally, offering a unique mix of attractive long-term, inflation-linked returns and growth providing significant scope to deploy further funds. ARE is engaging with other investors to increase its equity base and fund further growth with the aim of listing on the JSE in future,” Dames continued.
“Our participation in ARE underscores Absa’s commitment to support renewable energy development and enhance the green economy, as part of our sustainability agenda. Renewables are an important part of Absa’s sustainability strategy, and we target financing or arranging more than R100 billion for environment, social and governance-related projects by 2025. Our investment in ARE creates an opportunity for Absa to increase our role in the much-needed expansion of the renewable energy sector,” stated Jason Quinn, Interim Chief Executive at Absa Group.