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Africa's Largest Fund Manager Plans to Expand Green Energy Investments Over $854 Million

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Africa's Largest Fund Manager to Expand Green Energy Investments

The Public Investment Corp. (PIC), Africa's largest fund manager, plans to increase its investment in renewable energy as South Africa grapples with a power crisis that is hindering economic growth. The country's state-owned electricity provider, Eskom Holdings SOC Ltd., is struggling to meet demand due to outdated and poorly maintained coal-fired plants, resulting in severe power rationing. To address this issue, the government has turned to independent power producers, but the program has faced delays. The PIC, which oversees about 2.6 trillion rand in assets and is the largest holder of Eskom's domestic bonds, aims to contribute to building capacity and reducing reliance on Eskom. Currently, the fund manager has investments in renewable energy, including photovoltaic, concentrated solar power, and wind technology, which have added over 2,000 megawatts to the grid, as stated in its annual report. Kabelo Rikhotso, Chief Investment Officer at the PIC, emphasized the firm's commitment to expanding its renewable energy portfolio. He mentioned that they have already funded and have an exposure of 16.5 billion rand ($854 million) in renewable energy, with plans for further growth. Rikhotso also expressed the PIC's intention to incorporate solar panels on rooftops of properties where feasible, highlighting their dedication to embracing clean energy solutions. By investing in renewable energy, the PIC aims to contribute to resolving the power crisis and supporting sustainable economic development in South Africa.

Hot Take: Impact of Africa's Largest Fund Manager's Green Energy Investments on New Businesses

The Public Investment Corp.'s (PIC) decision to increase its investment in renewable energy could have profound implications for new businesses in South Africa. As the country battles a power crisis, the move by Africa's largest fund manager to diversify its energy portfolio could present significant opportunities for startups and SMEs in the renewable energy sector. The PIC's commitment to renewable energy, as emphasized by Chief Investment Officer Kabelo Rikhotso, signals a growing market and increased funding for green technologies. This could spur innovation and growth among businesses focusing on photovoltaic, concentrated solar power, and wind technology. Moreover, the PIC's intention to incorporate solar panels on property rooftops indicates potential growth in the market for solar solutions providers. This could also stimulate the creation of new businesses in the installation, maintenance, and innovation of solar technology. However, the PIC's move also presents challenges. As the fund manager increases its stake in renewable energy, competition for funding could intensify. New businesses must therefore ensure they have robust business models and innovative solutions to attract investment. Overall, the PIC's green energy investments could reshape South Africa's energy landscape, offering both opportunities and challenges for new businesses.
Story First Published at: https://financialpost.com/pmn/business-pmn/africas-biggest-fund-manager-to-grow-green-energy-book-beyond-854-million
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