The Climate Investment Fund and KLP are investing NOK 850 million in the establishment of a new platform with ambitious plans for renewable energy development in South Africa. The investment is partly financed by capital from exiting one of the fund’s first investments in the same country. 

The new platform, called “Anthem”, has a secured portfolio of more than 2.7 GW across 17 operating wind and solar projects of over 1GW, four projects under construction of 445MW, three projects in financial close of 1.2GW, and a further 11 GW pipeline under development.

For comparison, Norway’s entire power supply has a capacity of 40 GW. 

“These are the kinds of contributions needed to accelerate the transition to renewable energy in countries like South Africa, which today is dependent on coal power,”

Åsmund Aukrust

Minister of International Development

Born from the integration of African Clean Energy Developments (ACED) and EIMS Africa under the African Infrastructure Investment Managers (AIIM) managed IDEAS Fund as shareholder, Anthem combines deep development, asset management and operational expertise to deliver clean, reliable and cost-effective power to Eskom, large private offtakers, and the region’s growing energy market. Mahlako Energy Fund, an investment and advisory firm owned 100% by Black South African women, is also joining as an investor. 

The Climate Investment Fund is investing NOK 685 million directly, while KLP Norfund Invest (KNI) is investing NOK 170 million. KNI is the joint investment company of KLP and Norfund, owned 51% by Norfund and 49% by KLP.  

“Anthem will be a key investment in The Climate Investment Fund’s efforts to support the transition to renewable energy in South Africa, making a significant contribution in terms of avoided emissions, while also ensuring the country has reliable access to the energy needed for growth out of poverty,” says Bjørnar Baugerud, Head of The Climate Investment Fund at Norfund. 

“We firmly believe that the investment in Anthem will deliver solid returns for KLP’s owners, while also contributing to increased renewable energy production in South Africa. This aligns with KLP’s role as a long-term and responsible investor,” says Eric Nasby, Investment Analyst at KLP. 

Reinvesting capital from The Climate Investment Fund first investments 

This investment comes a week after The Climate Investment Fund exited one of its first investments. The investment in Scatec’s pioneering solar and battery project Kenhardt is now being taken over by South Africa’s Standard Bank, freeing up NOK 440 million for new investments. The investment yielded an annual return of 13% in South African rand. 

“As many countries are now cutting funding for aid and development, mobilising private capital is a prerequisite for success, and The Climate Investment Fund does this both by investing alongside private actors and by allowing private capital to take over when possible,” says Aukrust. 

Becoming a key player in South Africa’s renewable energy development

From its inception, Anthem will be one of South Africa’s largest renewable energy companies. 

“Access to capital on competitive terms is crucial for us to realise our ambitious plans for renewable energy development in South Africa, and we are therefore very pleased to have Norfund and The Climate Investment Fund on board,” says James Cumming, the CEO of Anthem. 

For renewable energy, almost the entire cost comes at the time of investment. This means that high capital costs, due to higher risk in developing countries, can hinder the transition from coal to renewables, which require less investment but are more expensive to operate. 

South Africa has one of the world’s highest shares of coal in power production, at over 80% (IEA). The climate benefits are therefore substantial if new renewable production can be realised. 

Standard Chartered Bank was Norfund’s financial advisor in the deal.  

The Climate Investment Fund is selling its stake in a power line project in India, marking its first exit since its establishment in 2022.

As climate change intensifies, smallholder farmers are caught in a vicious cycle of low productivity and environmental degradation. The Climate Smart Fund offers a promising model that addresses poverty alleviation alongside climate mitigation and adaptation, equipping farmers with the tools they need to thrive sustainably.

Anne-Beate Tvinnereim

Development Minister of Norway

speaking from COP 29

Konexa har en innovativ forretningsmodell, og vi er glade for å kunne bidra til Nigerias langsiktige sosiale og økonomiske utvikling med denne investeringen.

Birgit Edlefsen

Birgit Edlefsen

speaking from SVP, Norfund

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“By selling when we are no longer needed and recycling the capital, we achieve more climate impact,”

Bjørnar Baugerud

Head of the Climate Investment Fund

Managed by Norfund, the Climate Investment Fund was set up in 2022 to help avoid greenhouse gas emissions through profitable investments in renewable energy in developing countries with high emissions. Three years later, the fund is making its first exit from a project. 

Connected 2.5 GW of wind power in India 

In partnership with the Indian company ReNew Power, Norfund and Norway’s largest pension company KLP invested 900 million rupees (109 million NOK) in a power line project in the Koppal district of southern India in December 2022. The project was completed in October 2023.

“Through the investment, we have helped connect 2.5 GW of developed wind power to the national grid, enough to meet the needs of 7 million Indian households,” says Bjørnar Baugerud, head of the Climate Investment Fund at Norfund.

According to the Central Electricity Authority (CEA) in India, the country will need 170,000 kilometers of transmission lines and 47 GW of energy storage capacity (BESS) over the next eight years to phase in increased renewable power production.

Recycling with returns ensures efficient use of public capital

According to its mandate, the Climate Investment Fund is to “reinvest earned and freed-up funds from its investments.”

The project is now being sold to the Indian company Indigrid, with which Norfund also recently entered into a partnership for the development of new projects.

“As soon as we are no longer needed as an investor in a project, we will seek to sell to private entities so we can reuse the money and contribute more to avoiding emissions,” says Baugerud.

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.

Norfund has committed an additional $40 million to expand its African C&I energy portfolio, reinforcing its support for the region’s growing energy needs in the commercial and industrial sectors.

Over the past year, CrossBoundary Energy has successfully grown its awarded portfolio to around US$680M across 18 African countries, comprising 500 MW of solar, wind, and thermal assets and over 600 MWh of battery energy storage solutions. The portfolio features large-scale renewable-led hybrid power plants for mines, rooftop and ground-mount solar PV plants for industrial clients, and distributed solar PV and battery power solutions for telecommunications sites.

“The need for innovative energy solutions in Africa is growing rapidly. CrossBoundary Energy is a leading provider of solutions that are poised to bolster clean energy capacity and job creation on the continent,”

Rivhatshinyi Mandavha

Senior Investment Manager at Norfund