Airnergize raises R3.89bn for solar and battery projects in Africa

Airnergize Capital has raised R3.89 billion for its first fund, with its first investments expected to go into commercial solar and battery storage projects. The South African investment firm has attracted money from both development finance and private investors. The Development Bank of Southern Africa (DBSA) is putting R240 million into the fund. Other investors include New GX Capital, RMB Ventures, Standard Bank and Nedbank. Airnergize plans to invest across South Africa, sub-Saharan Africa and Indian Ocean markets.

Businesses are the first target

The fund's early focus will be on solar and battery projects serving commercial and industrial users. That could include businesses that want to generate some of their own electricity and store power for periods when solar generation is unavailable. For SMEs, the benefit is likely to come indirectly.

A small manufacturer, retailer, workshop or food business does not necessarily need to receive money from the fund itself. If a solar or battery project supplies that business with more reliable electricity at a manageable cost, it can reduce the amount it spends dealing with power interruptions or running backup systems.

For businesses with tight margins, those costs can make a difference. Reliable electricity can also help smaller businesses keep equipment running, avoid losing stock and operate for longer hours where demand supports it.

There could also be work for smaller suppliers

The spending will not only go to the companies that own the energy projects. Solar and storage projects need installers, electricians, maintenance companies, transport operators, security services and other contractors.

That creates potential work for SMEs operating around the projects, although the size of this opportunity will depend on how Airnergize structures each investment and which suppliers are used.

The fund goes beyond solar

Solar and storage are the starting point, but they are not the only areas where the money can be invested. Airnergize's mandate also includes power generation, electricity transmission, water infrastructure and gas. This gives the fund scope to put money into different types of infrastructure as projects are developed. For SMEs, projects in these areas can create opportunities further down the supply chain, from construction and maintenance to transport and professional services.

DBSA's R240m commitment

DBSA's investment is part of a wider effort by the development finance institution to support infrastructure projects and attract private capital. In this case, its money sits alongside funding from commercial banks and private investors. The fund will now move from fundraising to making investments. The projects Airnergize selects will determine where the R3.89 billion eventually goes and how much reaches solar, storage and other infrastructure.

For SMEs, the immediate question is less about whether they can access the fund directly and more about what happens around the projects it finances: better access to electricity, potentially lower operating costs and new opportunities to supply or service the infrastructure being built.