ImpactAlpha, August 26 – South Africa is a laggard in the renewable energy transition. Today, the country is 90% coal-powered. By 2030, South Africa aims to halve coal’s role and boost clean and renewable generation to more than 30%(including hydro and nuclear power).
UK Climate Investments is stepping in with a 253 million rand ($16.6 million) commitment to renewables developer H1 Holdings. The investor, a joint venture between the U.K.’s department for Business, Energy and Industrial Strategy and the Green Investment Group, will finance a 4-megawatt hydro project and two wind developments totaling 250-megawatts.
The deal is UK Climate Investments’ fifth investment and its second in South Africa.
H1 Holdings’ three projects are expected to come online in 2020 and provide clean power to 200,000 homes. They will add to the current 3,872-megawatts of installed renewables capacity in the country.
The deal also has an economic inclusion angle. H1 Holdings is a black-owned business, which in South Africa refers to anyone from a community that was systematically marginalized under the Apartheid system. Black-owned businesses are given preferred status for business contracts and partnerships under South Africa’s Black Economic Empowerment policy.
Also, H1 Holdings anticipates sourcing 40% of construction, operations and maintenance staff locally from the local communities where the projects are based, and will provide training to potential workers. Jobs creation is an important impact metric for investments in South Africa, where the official unemployment rate is nearly 30% and youth unemployment is the highest in the world.