uMhlaba

uMhlaba

Transaction Overview

During the year under review, Hulisani incorporated a new venture focused primarily on accessing land lease cash flows from IPPs in an innovative and unique manner.

Background

Hulisani and Graysmaker (Pty) Ltd established an incorporated joint venture, uMhlaba, held 90% by Hulisani

uMhlaba identifies, funds and commercialises land leases underlying the projects that are operational in the REIPPPP

The investment mandate is to procure the long-term cash flows underlying a portfolio of land leases, as the return correlates to an equity investment into an IPP but is senior to equity returns

The opportunity is realised through either a purchase of the lease or the purchase of the land. The land lease income is an income diversification strategy and provides a longer-term position in the renewables sector

Management and Operations

uMhlaba will provide Hulisani with diversification opportunities in accessing cash flows from lease income paid by IPPs

Hulisani is working in collaboration with Graysmaker to put systems in place which will ensure that the business launches successfully in the next financial year with a pipeline of identified assets

Performance

The strategy will allow for benefiting from income generated by lease cash flows and provide an opportunity for long-term local economic development in the areas by involving local communities

The income will be derived from lease cash flows from operating IPPs

The investment will provide the added benefit of benefiting from stable cash flows, zero vacancy, economic insensitivity, inflation protection and attractive long-term returns

The renewable energy industry in South Africa is a rapidly growing sector with competition for existing assets. For this reason, creating diversified income streams, as well as deriving more income from existing assets, is crucial to maintaining superior yields for investors

 uMhlaba has the ability to create opportunities for economic development in the areas where IPPs are situated for the term of the PPA