3 October 2008
The Evolution One Fund, a 10-year private equity fund that focuses on investments in clean technology (cleantech) in the southern African region, has raised R400-million from four core international investors to date, and is expected to grow to R1-billion by mid-2009.
The fund, managed by Cape Town-headquartered Inspired Evolution Investment Management, has secured the initial investment from the International Finance Corporation, Castleway Properties, the Swiss Investment Fund for Emerging Markets and the Finnish Fund for Industrial Cooperation.
Cleantech spans many industries, including clean energy generation, water purification, waste management and efficient production technology.
Inspired Evolution Investment Management executive director Zuko Kubukeli said that cleantech provided for opportunities across various sectors, enabling for more sustainable investments without foregoing the traditional returns of private equity.
“Having raised R400-million from our core international investors, we are now targeting a second round of international and local investors,” he said in a statement this week.
“We are single-mindedly focusing on building strategic partnerships and on sourcing proprietary and appropriate technologies for application within the [Southern African Development Community] region across a variety of investment projects.”
Lower costs, increased benefits
Evolution One’s investment philosophy is based on the premise that the use of cleantech products, services and processes not only provide superior performance at lower costs, but also reduce environmental and climate change impacts, thereby promoting mutually reinforcing benefits for society.
According to a report by New Energy Finance, global investment in the clean technology sector is already significant, estimated to be US$148.4-billion (about R1.2-billion) in 2007, and is forecast to exceed $226-billion (about R1.9-billion) by 2016 – from private equity and venture capital alone.
“High growth opportunities are emerging in the agribusiness, cleaner production, pollution control, waste management and transportation sectors, as well as the core areas of energy and water,” the statement read. “However, to date, no fund has focused on the role of cleantech in Africa where environmental and social issues make it a vitally important driver of the economic development of the region.”
Cleaner energy and the environment
The Evolution One Fund will make around 10 to 15 investments over a period of three to five years across the whole SADC region, with a focus on cleaner energy and the environment, and aiming to generate an enhanced annual internal rate of return by focusing on the following eight sectors and sub-sectors:
- Cleaner energy generation and energy efficiency
- Cleaner production technologies and processes
- Air quality and emissions control
- Water quality and management
- Waste management
- Agribusiness and forestry
- Natural products, organics and natural health
- Sustainable buildings and environmental real estate In all cases, particular attention will be paid to small, medium and micro-enterprises; broad-based black economic empowerment; and transformation benefits of underlying investment projects
“IFC’s investment in Evolution One Fund is in line with the World Bank’s overall strategy to support projects investing in technologies to combat climate change,” said IFC private equity and investment fund director Haydee Celaya. “This investment demonstrates IFC’s commitment to be a pioneer and a leader in the clean energy and climate change sectors in southern Africa.”
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