Johannesburg-based asset management firm Stanlib has decided to invest in equity stakes in private sector-developed projects through its infrastructure fund
Renewable energy development will be a primary focus of the fund, as well as investment opportunities in water, power, transport, telecommunications and oil and gas infrastructure projects.
The fund will invest in sectors that require third part capital and specifically, in projects that present a combination of risk and return. This forms a part of the company’s long-term strategy to strengthen alternative investment offerings across the continent, stated Stanlib.
Seelan Gobalsamy, CEO of Stanlib, said, “As we expand across Africa, we would like to focus on alternative assets and transactions that can make a real difference in South Africa and the continent. We have identified infrastructure as an area where we can have a great impact as infrastructure gaps are consistently cited as one of the biggest challenges to doing business in Africa. Through our investments, we aim to create employment and help grow the economies we operate in.”
The infrastructure fund, which is Stanlib’s maiden foray into infrastructure and private equity, has now achieved final close at US$103mn. Majority of the amount in the 10 year closed-ended fund would be channelled into South African infrastructure projects under development, with the remainder to be invested across sub-Saharan Africa (SSA). A second fund, focusing on post-construction and operational infrastructure assets, is also under development.
Stanlib’s focus has been on developing opportunities mainly in renewable energy, through the Department of Energy’s Renewable Energy Independent Power Producer Procurement (REIPP) programme. Through the REIPP, solar and wind power in South Africa are becoming important contributors to the national energy mix and Stanlib expects this trend to continue.
According to Greg Babaya, head of infrastructure investments franchise at Stanlib, the company provides a platform for alternative investments, which play an increasing role in institutional investment portfolios, considering private sector investment in public infrastructure is essential in South Africa and SSA as well.
