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Institutional investors bunch together to ensure green project funding stays on track

Institutional investors bunch together to ensure green project funding stays on track

The Green Climate Fund may be in danger of becoming dormant following the United States’ announcement that it will renege on its commitments to the Paris Climate agreement, but local fund managers are already stepping into the void, garnering both the capital and the goodwill of other investors, to ensure adequate capital is available to fund green projects.

Earlier this week Sanlam Investment Holding announced it has partnered with several European institutional investors and African infrastructure fund specialists to establish a financing facility for investment in greeen projects and infrastructure.

Launched under the label, Climate Investor One, it is the inaugural financing facility established by Climate Fund Managers, for an intended series of climate finance initiatives to combat the detrimental effects of climate change.

Climate Investor One, a global climate fund, will provide expertise, technology and financing to renewable energy projects in developing countries by mobilizing private sector financing at scale supported by catalytic public sector donor funding.

Sanlam Investment Holdings said Climate Investor One is founded on the significant energy infrastructure expertise and track record of its sponsors, FMO, the Dutch development bank, and Phoenix InfraWorks, a South African infrastructure development and fund management specialists, in partnership with Sanlam Investment Holdings.

The fund will simplify the process of capital deployment and will reduce the typical complexity of this type of funding by delivering an innovative “whole-of-life” solution that provides a single financing source for each of the respective development, construction and operational phases of a project’s lifecycle.

To this end, Climate Investor One provides early-stage project development services and financing. Construction is financed through equity funding, and later through long-term debt once the project is operational. This approach will allow fund to bring more projects to market, faster, delivering positive environmental and social impact sooner.

The anchor investors in Climate Investor one comprise the Directorate-General for International Cooperation in the Ministry of Foreign Affairs of the Netherlands, Atradius Dutch State Business, De Nederlandse Waterschapsbank N.V. (NWB Bank), Aegon Asset Management and FMO – all from the Netherlands – together with global partners from Norway (KLP), South Africa (Sanlam Investment Holdings) and the UK (Royal Borough of Windsor & Maidenhead Pension Fund).

Targeting Africa, Asia and Latin America, Climate Investor One will focus on Solar, Wind and Run-of-River Hydro renewable energy projects.

Sanlam Investments Chief Executive, Robert Roux (pictured) said, “We are very pleased to be part of the innovative CIO initiative and are proud of the new partnership we have established with FMO and Phoenix through our participation in CIO. Energy, development and climate change are core issues for Africa, as well as the world, and we are excited about the purpose of CIO and the long term relationships we have established with other major institutions though CIO”

Andrew Johnstone, founder and CEO of Phoenix InfraWorks said at the first closing “CIO represents a new way of doing business enabling a wider spectrum of public and private sector investors to work together in pursuit of a common purpose of impact and financial return. CIO really is a new generation of financing and thinking, both of which are necessary ingredients for progress and climate change management”.

Johnstone was in Namibia on 09 May this year, telling a Namibian investors conference organised by EOS Capital, about the pitfalls and the expectations of funding large-scale infrastructure projects, and how to manage these highly specialised financing vehicles.

About The Author

SADC Correspondent

SADC correspondents are independent contributors whose work covers regional issues of southern Africa outside the immediate Namibian ambit. Ed.

Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.