Operating Environment

The future of energy is green, with growing global demand
for renewable energy solutions.

The future of energy is green, with growing global demand for renewable energy solutions.

Global Environment

Green energy demand in Africa will be strongly influenced by the huge global growth in this sector. As costs of wind, solar and battery storage continue a rapid decline, by 2050 approximately two thirds of the world’s electricity is expected to come from renewable energy, primarily solar and wind, with the balance attributed to hydro and nuclear power, and other resources to a limited extent.

Over the same period worldwide demand for electricity is likely to increase 62%, with $13,3 trillion invested in new projects. In the US, clean energy resources supplied more of that nation’s electricity than coal for the first time ever in April 2019 (USA Energy Information Administration).

Regional Context

Hulisani aims to gain significant benefits from the current favourable policy environment for the growth of renewable energy projects. Government’s target is for the renewable energy sector to provide 42% of energy requirements by 2030.

The impact of policy certainty in the region is expected to see some R56 billion in foreign direct investment, rural development and upliftment by 2022. REIPPP and related IPP projects are expected to add energy infrastructure investments of over R1 trillion by 2030.

Furthermore, the unbundling and restructuring of Eskom will drive new opportunities for investment in clean power generation.

A significant potential project pipeline for Hulisani is also anticipated as a result of the relaxation of regulations in licensing 500 Megawatt solar projects and other renewal energy projects below 10 Megawatts.

Operational Imperatives

Hulisani focuses on primary and secondary opportunities in diversified Independent Power Producers (IPPs). We target primary investment opportunities at bid stage, either during construction or prior to commercial operation date, where early stage investment will provide a much higher yield.

Secondary opportunities are sought via operating assets that already have a Power Purchase Agreement (PPA) in place, to provide inflation-linked cash flows through dividends.

Our due diligence process shortlists assets with solid operational performance or track record in the project developer and monitors contract performance, returns, risks, socio-economic impact and sustainability.

Thereafter, we remain actively involved in management of the portfolio through mandatory board seats and constant engagement with management at the asset level.