The Climate Investment Fund is investing in a new South African platform for renewable energy, operated by Pele Green Energy Group. The capital will finance projects that will avoid 1.9 million tons of CO2.
Pele Green Energy Group is a South African Black Economic Empowerment (BEE) infrastructure company, founded by five young entrepreneurs in 2009. The group develops, owns, builds, and operates renewable energy projects. As of today, they have 980 MW in operation, 670 MW under construction, and a further pipeline of more than 5 GW under development.
The Climate Investment Fund, managed by Norfund, is partnering with Nedbank, one of South Africa’s largest banks, to invest a total of R575 Million (350 million NOK) to scale up the company’s investments in renewable energy.
Avoids equivalent of 4% of Norway’s emissions
“We see this investment as a significant contribution to meeting South Africa’s growing energy needs while avoiding large scale emissions,” says Bjørnar Baugerud, head of the Climate Investment Fund at Norfund.
The projects the investment will help finance are estimated to avoid emissions of 1.9 million tons of CO2 per year. This alone corresponds to 4% of Norway’s annual emissions – or more than the emissions from Equinor’s refinery at Mongstad, the largest source of emissions in Norway.
“This is a brilliant example of how effective the Climate Investment Fund is in accelerating the global energy transition and limiting climate change, which affects the poorest the hardest,” says Minister of International Development Åsmund Aukrust.
Aukrust refers to an independent evaluation of Norfund and the Climate Investment Fund’s energy investments presented last week, which showed very effective results.
Focuses on energy for businesses and battery storage
Norfund first invested in Pele Green Energy in 2023, and the investment of approximately 400 million NOK has contributed to the construction of a portfolio of large solar and wind power plants. The company now needs more capital to finance further growth, which is planned within projects that deliver energy directly to businesses (C&I), investments in battery storage, and government tenders for larger renewable projects.
“This transaction is a game-changer for the Pele Energy Group and the broader renewable energy sector,” said Gqi Raoleka, CEO of Pele Energy Group. “Having Nedbank and Norfund as strategic partners in our capital structure reflects their strong belief in our vision and capabilities. This backing enables us to accelerate project development, scale impact, secure new opportunities, and drive sustainable energy solutions that will have a lasting impact on Africa’s energy future.”
South Africa has been severely affected by power rationing in recent years, and last week this reached its highest level in over a year after several power plants failed.
As the world’s 14th largest emitter of greenhouse gases, South Africa’s energy sector is heavily dominated by coal power, which accounts for almost 90 percent of the energy supply.