Lereko

Lereko Metier Sustainable Capital Fund

Lereko Metier Sustainable Capital (LMSC) targets energy efficiency, renewables, water and waste management businesses and projects supporting the region’s development objectives and environmental commitments. Attractive opportunities in this asset class are driven by sustainability and infrastructure requirements and a supportive policy environment.

LMSC targets investments which deliver social and environmental benefits, as well as returns on financial capital. This will be deployed across both development capital transactions (as is necessary for renewable energy) and later stage transactions (for example, in the waste management sector). A summary of LMSC’s investments is provided below:

AE –AMD Renewable Energy (Pty) Ltd, with corporate offices in Cape Town, develops and operates renewable energy generation projects. The company was successful in the first round of the Renewable Energy Independent Power Producer Project (REIPPP), holding a stake in the Herbert 1 (20MW) and Greefspan 1 (10MW) solar photovoltaic projects in the Douglas area of the Northern Cape Province. On 18 November 2013, Herbert 1 started generating its first 10MW, five months ahead of plan.

AE AMD plans to further establish itself as an REIPPP through developing and investing in renewable energy plants, with a primary focus on solar PV and wind.

Mainstream Renewable Energy, the sponsors and operator of wind projects, are proven developers. They have three successful operational wind projects acquired from the first round of the Department of Energy’s renewable energy procurement programme. LMSC, via LMRF, secured equity stakes in the three projects in the third round of the Department’s procurement programme.

The projects all achieved financial close in February 2015.

The wind farms will be constructed on a split Engineering, Procurement and Construction (“EPC”) basis. Siemens will supply and build the turbines while Murray and Roberts will construct the balance of plant.

The initial holders of the equity rights, Genesis Eco-Energy, remain partners in these investments

 

Khobab is a 140MW wind farm located within the Hantam municipal area in the Northern Cape. The project is to be located next to the Helios transmission substation approximately 70 km north of the town of Loeriesfontein.LMSC will invest R66 million with the total LMRF investment being R141 million. The project represents a total capital commitment of approximately R3.6 billion including debt and equity.

 

Loerisfontein 2 is a 140MW wind farm located within the Hantam Municipal area in the Northern Cape. The project is to be located next to the Helios transmission sub-station approximately 70 km north of the town of Loeriesfontein.LMSC will invest R63 million with the total LMRF investment being R133 million. The project represents a total capital commitment of approximately R3.4 billion including debt and equity.

 

Noupoort is an 80MW wind farm project within the Umsobomvu Municipal area situated in the Northern Cape. The project is located 5km east of the town of Noupoort. LMSC will invest R33 million in the wind farm with the total LMRF investment being R70 million. The project represents a total capital commitment of approximately R1.8 billion including debt and equity.

Bokpoort Concentrated Solar Power is a 50 MW concentrated solar power (CSP) project that was selected as the only CSP plant in the second round of the REIPPP. The Bokpoort CSP corporate office is in Johannesburg with the plant itself located 120km south east of Upington, Northern Cape.

Bokpoort CSP is structured as an independent power producer with Saudi Arabian based ACWA Power International being the operational partner. Bokpoort CSP is project financed based on a 20-year Power Purchase Agreement with Eskom, supported by government guarantees, with a power tariff indexed with CPI. The project uses CSP trough technology which currently makes up more than 95% of the installed base of global CSP capacity and has a thermal energy storage capacity of 1 300MWh (thermal), equivalent to about 9.5 hours of operation.

The plant will draw water from the Orange River through a dedicated pipeline and will operate continuously with a total staff complement of approximately 48, largely employed via a third party operating and maintenance contract. The R5.1 billion project’s construction programme is well advanced with commissioning expected at the end of 2015.

Kathu Concentrated Solar Power is a 100 MW CSP project in which LMSC secured an equity position through LMRF. Kathu CSP was bid into the CSP specific procurement round held in March 2014 and achieved preferred bidder status late in the same year. The development of the plant is led by GDF Suez who are the strategic and operational partner. Both Bokpoort CSP and Kathu have thermal energy storage via molten salt technology. This allows power to be dispatched during the evening and morning peak, providing valuable and reliable power to support Eskom during peak periods.

Sindila Hydro is a 5.25 MW run-of-river hydropower project located on the Sindila River in the Bundibugyo district in western Uganda. The project is being developed by KMR Infrastructure (“KMRI”) and has been selected for support by the joint KfW and Uganda Government Global Energy Transfer Feed-in Tariff (“GETFiT”) programme. The programme provides the project with a tariff premium on top of government renewable energy tariffs which enhances returns.

LMSC secured investment rights into Sindila, as well as the adjacent Ndugutu 5 MW hydropower project also under development by KMRI. LMSC are shareholders alongside KMRI as well as a leading international Independent Power Producer.