Old Mutual Cash Drive Boosts Infrastructure Fund to $1.5 Billion

Old Mutual Ltd.’s African Infrastructure Investment Managers, an investor in South Africa’s renewable energy program has raised additional cash to boost its fund to 22 billion rand ($1.5 billion).

The fund, raised 5.5 billion rand to add to the open-ended reserve that is targeting power, digital, and transport infrastructure development over the next three years, Managing Director Vuyo Ntoi said in an interview.

“The market has reached an inflection point with public policy support catalyzing healthy deal flow and increasing private sector investor appetite,” he said. “We are seeing 2.5 gigawatts of potential self-generation at the moment.”

The new commitments were secured from 19 South African institutional and pension fund investors, with two-thirds of the capital being pledged by new financiers.

Anticipated policy changes to support increased allocation to infrastructure assets from the country’s pension industry may present fertile ground for fund managers to leverage the shift toward renewable energy generation. Government is currently reviewing Regulation 28 of the Pension Funds Act, which governs the way managers of pension funds invest in various asset classes, after proposed amendments to this law were closed for public comment on March 29.

South Africa will announce winning bidders for its fifth renewable energy bid round by the end of the month, with another round expected by February next year. Government’s pipeline for such projects is improving investor sentiment in the sector, according to Ntoi.

“The clear and predictable procurement of projects have re-started, and that makes it easier for investors to plan something like a fund-raising with an understandable pipeline of projects coming from the government’s side,” Ntoi said.

AIIM is also looking out for a number of fiber and data-center projects coming up, having invested in similar deals previously.

Source: Bloomberg