New fund seeks to boost investment and diversity of South Africa energy

A R1.5bn (US$102m) investment fund has been launched in South Africa to boost investment in the country’s energy sector and encourage more black participants, especially women, in the sector.

The Mahlako Financial Services fund is a subsidiary of Mahlako a Phahla Investments, a women-led company focused on energy and infrastructure. It plans to invest in existing and new renewable energy assets and the companies that service them; SMEs involved in rooftop solar, energy storage and energy efficiency; and storage facilities in the midstream oil and gas sector.

“This fund is the first of its kind – a 100% black women-owned energy fund with a mandate that expands beyond renewable energy, to include gas and energy services sectors, as we endeavour to tackle, disrupt and transform South Africa’s energy sector,” said fund co-founder Makole Mupita.  

A company brochure detailing the fund’s ambitions, said it seeks to redress the historical exclusion of black people from the ownership of productive assets in the economy, particularly in the energy sector. The investment team has managed over R4bn in funds to date and last December announced a partnership with Amazon on a solar project that provides power to its data centres.  

There is significant scope for investments to help diversify South Africa’s energy sector. In 2019, the country published an Integrated Resource Plan that would help to address the insufficient energy capacity that has resulted in years of rolling power blackouts. The plan includes a greater use of renewables, expanding their supply of electricity from 3.4% in 2017 to 24.7% by 2030. However, under these plans, coal remains the primary fuel for power generation, dropping from 88% in 2017 to 58.8% in 2030.