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GreenX

The business of Vantage GreenX comprises of three senior debt funds. Vantage GreenX Fund Advisors (Pty) Limited established its R2.16 bn Vantage GreenX Note I in 2013 (Note I), a further R2.05 bn Note II in 2018 and R3.74 bn Note III in 2021. All three are funds that invest in energy and South African renewable energy projects that exhibit stable cash flows and strong defensive characteristics.

 

GreenX Notes I, II and III provide investors with exposure to South African renewable energy projects through the provision of senior debt to projects that form part of a carefully selected portfolio. GreenX has selected a portfolio of assets to ensure Fund performance in accordance with its mandate. This objective is achieved through careful consideration of the following key factors :

 

• The underlying sponsor and construction entities
• The technology and track record thereof
• The geography of each particular project
• The social and environmental contributions of the project.

GreenX seeks to capitalise on a number of significant economic trends:

 
  1. The continued commitment of the South African government to reducing the country’s carbon footprint through the extended rollout of a renewable energy program,
  2. The requirement that the majority of funding for these projects originate from local banks in ZAR, and the foreseeable requirement for increased liquidity in the market going forward due to forthcoming statutory requirements such as Basel III,
  3. The expansion of African infrastructure, in particular energy infrastructure, to support sustainable economic growth on the continent, and
  4. South Africa’s response to the carbon border adjustment mechanism (CBAM) being rolled out in Europe, and the pressure that it is putting on local business to produce their products using clean energy.

GREENX NOTE I

 

The inaugural GreenX Note I comprises a portfolio of eight renewable energy projects, all of which have reached their operational stage since the initial investment.

• A 30MW solar PV plant in Mpumalanga
• A 28MW solar PV plant in Mpumalanga
• A 75MW solar PV plant in the Eastern Cape
• A 74MW wind plant in the Northern Cape
• A 140MW wind plant in the Eastern Cape
• A 134MW wind plant in the Eastern Cape
• An 85MW solar PV plant in the Northern Cape (GreenX divested from this in 2022)
• A 100MW solar CSP power plant in the Northern Cape

 

GreenX Note II

 

Since the establishment of Note I, GreenX has evolved into a financial-close lender, investing alongside banks at financial close. GreenX provides investors with the opportunity to invest in an asset class that may not ordinarily have been considered, nor been available for investment in the ordinary course of business. Following on from the success of Note I, GreenX reached final close on Note II in 2018, with commitments of R2.05 billion ($125 million). Note II has the same fund structure as Note I and it also focusses on investing senior debt in South African renewable energy projects. Note II differs from Note I in that it only provides CPI-linked debt as a financial-close lender, rather than functioning as a sell-down and syndication channel for banks.

 

GreenX Note II is now fully invested and comprises a portfolio of six renewable energy projects, all of which are now in their operational phase:

 

• A 75MW solar PV plant in the Northern Cape
• A 75MW solar PV plant in the North-West
• A 120MW wind plant in the Eastern Cape
• A 33MW wind plant in the Western Cape
• A 45MW solar PV plant in the Northern Cape
• An 86MW solar PV plant in the Northern Cape

GreenX Note III

 

GreenX Note III came into being in 2021 and has been structured along the same lines and Notes I and II. Note III is in the process of being deployed to renewable energy projects in South Africa as follows:

 

  • A 140MW wind project in the Northern Cape selling through an energy trader with numerous offtakers
  • A 675MW solar cluster in the Northern Cape, comprising three contiguous sites, and selling to a number of offtakers through two (possibly three) different energy traders
  • A 720MW cluster of three 240MW wind projects in the Karoo selling through a number of energy traders.

 

GreenX will also explore additional power and infrastructure opportunities over and above the Renewable Energy IPP programme including gas and co-generation programmes. Other countries on the continent are investing in significant infrastructure programmes, with sustainable energy constituting a large proportion. The Advisor will explore opportunities to provide investors exposure to non-SA projects.

 

What value does greenX Provide to its investors?

 
  • GreenX will carefully select projects and hand-pick a portfolio to ensure an optimal balance of technologies, locations and sponsors, so as to diversify any single concentration risk.
  • GreenX will engage with primary lenders and at a detailed project level to provide investors with exposure to the energy sector, mainly renewable energy projects that institutional investors wouldn’t otherwise consider on a standalone basis.
  • Vantage has developed extensive networks on the continent, enabling access to attractive deal flow that investors will be able to leverage off.
  • Through its management team and credit committee, the the GreenX Note Manager will bring a team to each negotiation that understands project finance and will play an active role in project and loan documentation negotiations.
  • GreenX provides investors with an attractive, risk-adjusted return linked to long-term CPI whilst at the same time offering a compelling financial solution to potential investees.