British International Investment (BII) and South Africa-based asset manager Alexforbes Investments have committed 1 billion rand (US$63 million) to the Revego Africa Energy Fund, in a move aimed at expanding the secondary market for renewable energy assets in Africa’s most industrialised economy.
The investment, announced on Tuesday, is designed to improve liquidity in South Africa’s renewable energy sector by enabling developers to sell operational assets to long-term investors, freeing up capital for new projects.
BII, the UK government’s development finance institution, said the transaction supports South Africa’s energy transition and aligns with Britain’s backing of the country’s Just Energy Transition Partnership (JETP), an international framework intended to help emerging economies shift away from coal while supporting economic development.
According to the partners, the Revego fund will focus on acquiring stakes in wind and solar projects that are already operating or nearing completion. By providing an exit route for early-stage developers, the fund is expected to reduce balance-sheet constraints and accelerate the rollout of new renewable capacity.
South Africa has faced persistent electricity shortages for more than a decade, largely due to ageing coal-fired power stations and delays in building new generation capacity. While renewable energy investment has expanded in recent years, developers have continued to face funding and refinancing constraints.
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“By unlocking liquidity, we enable early-stage developers to recycle capital into new greenfield projects,” said Chris Chijiutomi, managing director and head of Africa at British International Investment. “This is about building a functioning secondary market that can support the scale of investment South Africa needs.”
Supporting a just energy transition
The investment forms part of the United Kingdom’s broader support for South Africa’s decarbonisation efforts under the JETP, which was launched in 2021 with backing from a group of developed economies including the UK, the European Union and the United States.
Under the partnership, South Africa aims to accelerate the shift away from coal, which currently accounts for more than 80% of its electricity generation, while mitigating the social and economic impact on coal-dependent regions.
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BII said its participation in the Revego fund reflects a strategy to move beyond early-stage project finance and focus on building deeper capital markets for renewable assets across sub-Saharan Africa.
Alexforbes Investments said the commitment would help attract additional institutional capital, including from pension funds and insurers seeking long-term, inflation-linked returns from infrastructure assets.
Broader UK support
The investment comes days after the UK government announced the extension of a US$1 billion climate-related debt guarantee for South Africa, aimed at supporting reforms in the country’s electricity distribution sector and financing low-carbon infrastructure.
The guarantee, announced on Jan. 22, is intended to support the Municipal Utility Reform Project and other initiatives designed to improve the financial sustainability of local electricity distributors, according to the British High Commission, cited by Bloomberg.
London has said its total contribution to South Africa’s JETP amounts to around 1.5 billion euros (US$1.6 billion), combining grants, concessional loans and guarantees.
South Africa’s renewable energy sector has expanded rapidly since the launch of its Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) more than a decade ago. However, analysts say the lack of a deep secondary market has limited the pace at which developers can recycle capital into new projects.
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Industry participants say transactions such as the Revego fund investment could help address that constraint by providing predictable exit options and attracting long-term institutional investors into the sector.
While challenges remain, including grid constraints and permitting delays, the government has identified renewable energy as a central pillar of its strategy to end power shortages, reduce emissions and support economic growth.
