AIIM reaches final close on wind farm projects to power South African mining operations

African Infrastructure Investment Managers (AIIM), a division of Old Mutual Alternative Investments, has reached financial close on the 140MW Khangela and 140MW Umsinde Emoyeni wind farms to supply renewable energy to the operations of Rio Tinto’s Richards Bay Minerals (RBM)  and Sibanye Stillwater via wheeling agreements.

The projects have been led and developed by AIIM’s renewable energy project development platform ACED. Reatile Renewables has co-invested in the projects alongside the AIIM-managed IDEAS Fund, one of South Africa’s largest domestic infrastructure equity funds. Rand Merchant Bank (RMB), a division of FirstRand Bank Limited, is the sole mandated lead arranger for both projects, and operations and maintenance services for the projects once built will be provided by AIIM’s in-house operator, EIMS.

“We are immensely proud to have achieved financial close and construction commencement on another two private renewables projects in partnership with some of South Africa’s key mining houses. Not only will the projects provide Rio’s Richards Bay Minerals and Sibanye Stillwater with clean energy for their operations, but they will also create jobs and development funding streams to support and grow local communities living adjacent to the projects,” said James Cumming, General Manager of ACED.

The deal entails the sale of power to the mining houses through 20-year Power Purchase Agreements. Khangela and Umsinde Emoyeni Wind Farms are situated near Murraysburg in the Western Cape, with a small portion of the proposed development site falling into the Northern Cape. Windlab South Africa (now Seriti Green) was the early-stage developer of the sites, which were then acquired and developed to financial close by ACED.

“The addition of increased power generation capacity to the national grid will contribute to offsetting the power deficit currently being experienced in the country,” said Cumming.

These deals mark the ACED team and the rest of the team having brought about 470MW of private wind and solar projects to financial close in the last 24 months;  enhancing the consortium’s collective drive to be a leader in renewable energy development and operation in South Africa. This is further to the gigawatt of projects they have already developed and operate via the South African Renewable Energy Independent Power Producer Procurement Programme.

“AIIM continues to be committed to and successfully executing its mandate of investing in renewable energy projects that can deliver sustainable investment returns over the long-term to our predominantly South African pension fund investor base,” said Sechaba Selemela, Investment Principal at AIIM. He also highlighted the benefit of having companies such as ACED and EIMS in the AIIM fold, noting that “our in-house development platforms provide us with a differentiated and steady flow of large scale investment opportunities, which are unmatched in this market.”

Selemela added that the Khangela and Umsinde Wind Farms are 2/3rds of the largest wind cluster on the continent with the last project expected to close in the next few months. This portfolio follows from similar wind farm developments, Msenge Emoyeni and Castle Wind Farm, which both reached financial close in 2023.

Simphiwe Mehlomakulu, Executive Chairman of Reatile Group, marked this as another win for South Africa, “We are delighted to have reached financial close on both projects and support big businesses such that they continue to create employment  and opportunities in the South African communities in which we operate. We continue to bring tangible solutions to alleviating load shedding by bringing sustainable generation capacity to the grid in South Africa.”

Managing Director at RBM and Rio Tinto Iron and Titanium (RTIT) African Operations, Werner Duvenhage, emphasised the significance of this project, stating, “This project is expected to reduce our annual emissions by about 470kt CO2e, equivalent to about 20% of our baseline emissions, and fulfill approximately 26% of RBM’s existing energy requirements.”

Sibanye-Stillwater CEO, Neal Froneman said, “Financial close of the Umsinde Emoyeni wind farm marks another critical step in our journey to carbon neutrality by 2040. The renewable energy secured through our four PPAs will enable a stepped reduction in our carbon footprint, aiming to contribute not only to mitigate the effects of climate change, but also enhancing the sustainability and shared value creation of our SA operations through favourable pricing relative to current supply. We continue to develop and execute energy solutions that contribute to the delivery of our strategy.”