uMhlaba focuses on identifying, valuing and purchasing the cash-flows from the long-term leases underlying the renewable energy projects banked through the REIPPP in South Africa.

uMhlaba is an innovative, unique business proposition. It procures long-term cash flows underlying a portfolio of land leases arising from operational renewable energy projects. The costs of these leases are paid out of operational expenses and therefore are paid out even before the servicing of senior debt and the payment of dividends.

The leases or the land are purchased where there is potential upside, thus creating an income diversification strategy and providing a longer-term position in the renewables sector.

Project Highlights

  • Opportunities for long-term cash-flows from leases underlying the renewable energy projects banked through REIPP
  • Land leases identified in the market estimated to have a value of around R450 million and provide an investment rate of return of 16% (FCF basis)
  • Potential stand-alone business as more opportunities open up – estimate an annual market of R250 million for next two years and R150 million for two years thereafter
  • In FY2019 offers by uMhlaba for leases have been accepted by seven landowners, where the transactions consider an optimal mix of equity and debt imply shareholders are not diluted
  • The next milestones for uMhlaba are the successful raising of up to R450 million and reaching financial close on the first seven projects valued at ~R160 million