Hybrid Equity (HE), a division of Old Mutual Alternative Investments (OMAI), is pleased to announce that it will increase its stake in Mulilo, a renewable energy developer and strategic equity investor with a further investment of ZAR420 M.

HE has been an active preference shareholder in Mulilo since 2015 when it invested ZAR120 M and increased its stake in 2020 with another ZAR380 M. The investment represents a key goal of OMAI which is to achieve a transition to cleaner energy for South Africa and contribute towards positive climate action.

Mulilo are considered market-leading renewable energy developers and were awarded projects in both the Independent Power Producer Risk Mitigation Programme and in Round 5 of the Renewable Energy Independent Power Producer Programme (REIPPP).

Since its formation in 2008, Mulilo has been at the forefront of South Africa’s drive to deliver clean and affordable electricity to the national grid. Mulilo’s focus is on wind and solar technologies, and it develops, builds, owns and operates large scale renewable projects throughout South Africa. Mulilo has been successful in the REIPPP from the outset and has been awarded more than 420MW worth of projects.

HE’s investment could potentially increase to ZAR750 M once further projects reach financial close as the company seeks to fund their total equity into South Africa’s risk mitigation procurement programme.

HE Co-Head Mujaahid Hassan says, although not without its faults, the REIPPP programme has been largely successful. Between 2011 and 2021, the Department of Mineral Resources and Energy, IPP Office and Eskom, guided by the targets of the Integrated Resource Plan, have closed four bidding rounds under competitive circumstances for the REIPPP tender. This success was enabled by allowing the private sector and IPPs to invest.

The latest bid window, number 5, awarded 25 projects to IPPs who will jointly invest ZAR50 B to collectively provide 2,583MW of renewable energy.

Hassan says: “It is evident from this time period that much has changed and improved over time. There remains significant international interest in the REIPPP programme, and it continues to attract various forms of capital.

“Despite the various bid windows to date, South Africa 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 cease the opportunities presented by South Africa’s current reliance on fossil fuels,” he says.

By funding Mulilo, HE is supporting a leading renewable energy developer with deep stakeholder relations. Mulilo’s projects attract foreign investment as well as benefit local communities and black South Africans, both of whom have shareholdings in the projects.

“We are excited to continue our strategic partnership with HE through its increased preference share investment in the business, as it allows us to unlock further capital to scale our projects, and thereby continue making a significant impact on many communities throughout the country,” says Christopher Aberdein, Chairman of Mulilo.

Hassan says: “The company is broadening its operations to participate in commercial and industrial opportunities and are therefore accelerating the adoption of renewable energy. We hope to continue our funding partnership with Mulilo as they work towards this goal.

“The Mulilo management team has solid credentials and are fully committed to the spirit of the REIPPP which seeks to grow South Africa’s renewable energy supply and support local communities and black shareholders while doing so.”