African PE Fund in Talks With BlackRock to Sell Renewables Stake

(Bloomberg) -- African Infrastructure Investment Managers Ltd. is in talks with companies including BlackRock Inc. to sell a stake in one of the continent’s biggest renewable energy businesses, people with knowledge of the matter said.

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The infrastructure-focused private equity fund owned by Old Mutual Ltd., South Africa’s second-largest insurer by revenue, has grown its renewable energy business across the continent to a size where it’s seeking to bring in investors, the people said, asking not to be identified as the talks are at an early stage. Other potential investors could include Norway’s Norfund AS, one of the people said.

A sizable business could allow a major investor such as BlackRock to expand into a rapidly growing industry in Africa. AIIM has stakes in renewable projects that are generating electricity or building plants that will produce more than 2,800 megawatts of power. They form a large part of the $2.8 billion in assets AIIM has under management.

The industry has seen an increasing number of deals in recent years. Africa Finance Corp. and Egypt’s Infinity Group acquired Lekela Power and Copenhagen Infrastructure Partners secured control of South Africa’s Mulilo Energy Holdings Ltd. in a bid to take advantage of growing demand for wind and solar energy.

AIIM, BlackRock and Norfund declined to comment.

BlackRock, which oversees more than $10 trillion, last year entered Africa’s renewable energy industry by taking a stake in Kenya’s Turkana Wind Power, the continent’s biggest wind farm. Norfund manages a $2.3 billion investment facility for developing nations.

While the majority of AIIM’s renewable energy investments are in South Africa, where more than 6,000 megawatts of large-scale solar and wind plants have been installed, it’s invested in projects ranging from a solar facility in Burkina Faso, a wind farm in Kenya and off-grid projects across the continent.

--With assistance from Kari Lundgren.

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