Cape Town, South Africa: Gaia Renewables 1, listed on the Cape Town Stock Exchange (CTSE), has concluded agreements to refinance empowerment stakes in De Aar 1 and 2 wind farms in the Northern Cape.
The transaction, worth in excess of R100 million, replaces existing high-cost debt used to fund empowerment ownership.
“This reduces funding costs significantly and accelerates the timeline for substantial economic benefit to empowerment partners,” says Dr. Hendrik Snyman, chief investment officer of Gaia Fund Managers.
De Aar 1 is a 100.5 MW wind project, whilst De Aar 2 is a 144 MW wind project.
“This transaction reflects our core strategy, which is to invest in operational infrastructure assets with proven performance and where risk is better understood,” Snyman adds.
Transactions of this nature also support the development of a functioning secondary market for renewable infrastructure assets, enabling earlier-stage investors to recycle capital into new projects.
The refinancing leverages the operational maturity of the wind farms, where key risks have largely been resolved, enabling a more accurate assessment of performance and credit risk.
Having exceeded performance expectations, the projects demonstrate strong operational reliability and stable cash flow generation.
The transaction directly supports empowerment partners DLO Energy Resources and Obsidian Infrastructure Group to enjoy accelerated economic benefit from their interest in each of the wind farms.
Initially, with the project having several estimated parameters, shareholder interests such as empowerment parties are financed through higher risk and therefore higher cost debt.
Gaia’s refinancing replaces this with a lower-cost, risk-aligned instrument which accelerates realised economic participation for empowerment shareholders.
By focusing on operational projects with predictable cash flows, Gaia can deliver stable, risk-adjusted returns to investors while advancing meaningful social impact to empowerment partners.
“We see significant opportunity in the secondary market for renewable infrastructure where Gaia has been active as an early mover since the inception of South Africa’s renewable energy programme,” says Snyman. “This allows us to support empowerment and deliver consistent returns, while contributing to South Africa’s just energy transition. Furthermore, investors benefit from long-term, inflation-linked returns with reduced risk.”
Linda Mabhena-Olagunju, Founder and CEO of DLO Wind, welcomes Gaia’s participation as a funding partner.
“Their investment is a strong validation of our strategy, our execution capability, and the quality of our assets. It also speaks to the importance of supporting more female-owned energy companies in the sector, particularly where there is a proven ability to develop and deliver investment-grade projects. We look forward to building a long-term partnership with Gaia and to working together on future opportunities,” Mabhena-Olagunju says.
Andrew Shiaka, CEO of Obsidian Infrastructure Group, says the company is pleased to have partnered with Gaia on this “important transaction”.
“Gaia’s deep understanding of energy and innovative approach to structuring were instrumental in bringing the transaction to a successful close. This investment represents a meaningful step in our journey to build a scaled portfolio of infrastructure assets across the region," he adds.
The primary investors in Gaia Renewables 1 to date are the Kruger Prudential Prescient Fund, the Kruger Balanced Prescient Fund, the Kruger Equity Prescient Fund and the Kruger Income Prescient Fund, managed by Kruger International Asset & Wealth Management.
Says Mia Kriegler, Director of Asset Management at Kruger International, “Operational renewable energy infrastructure projects offer attractive long-term, risk-adjusted returns for South African investors. Through our partnership with Gaia, we have created an opportunity for investors to access high-quality wind and solar energy investments via well-regulated collective investments. In addition to delivering compelling returns and meaningful diversification benefits, these investments enable investors to play an active role in supporting the expansion of clean energy infrastructure in South Africa.”
The investors of Gaia Renewables 1 will subscribe for listed preference shares. Gaia Renewables 1 will then invest indirectly in the DLO and Obsidian opportunities.
The transaction is subject to customary regulatory approvals and closing conditions.
