Rockefeller Fund in first direct clean energy investment

The Rockefeller Brothers Fund (RBF), the oil-linked philanthropy that made a splash two years ago with its plan to divest from fossil fuels, has made its first direct clean energy investment by backing Mainstream Renewable Power’s pan-African renewables platform, Lekela Power.

The fund is committing $12.5 million as part of a $117.5 million equity injection from the likes of the IFC, the IFC African, Latin American and Caribbean Fund (ALAC), the IFC Catalyst Fund, Missouri-based Ascension Investment Management and South African fund manager Sanlam, which manage ALAC and the IFC Catalyst Fund alongside IFC Asset Management Company. The club also includes other undisclosed investors. First Avenue acted as placement agent.

“I am very pleased the RBF will invest in Mainstream, an investment sourced by our outsourced chief investment officer, Perella Weinberg Partners, which will bring renewable energy to communities across Africa. I’m confident that if John D. Rockefeller were alive today, he too would recognise the enormous opportunities in the clean energy economy and be at the forefront of the global shift to renewable resources,” RBF president Stephen Heintz said.

RBF still has 3.3 percent of its $816 million portfolio invested in fossil fuels, down from 7 percent two years ago, but its aim is to fully divest from fossil fuels.

Mainstream is also contributing $60 million from its balance sheet, raising a total of $177.5 million in equity to help capitalise Lekela, its platform with emerging markets private equity firm Actis, which owns 60 percent of it. Lekela is aiming to build 1,300MW of new renewable facilities by 2018, including four more wind farms in South Africa, two wind farms and a solar plant in Egypt, as well as wind farms in Senegal and Ghana.

Last August, sister publication Low Carbon Energy Investor reported that Mainstream was targeting $240 million for the fundraising round, of which IFC was ready to commit $40 million. “We are bringing in a select number of investment partners that share our view about Africa’s renewables potential,” Mainstream managing director Barry Lynch explained then. “It’s a small group of family offices, impact investors and some institutional investors. More and more investors want a direct investment type of structure.”

Mainstream and Actis have partnered on at least one other occasion: the 2013 creation of Aela Energía, a Chile-focused power platform in which the private equity firm also owns 60 percent. Actis also holds majority stakes in Globeleq Mesoamerica in Central America and Zuma Energía in Mexico, which were established with the intent of building 600MW to 70MMW generating portfolios within a five-to-seven year time frame.

A similar logic was pursued when the firm bought a controlling position in Brazil’s Atlantic Energias Renováveis in 2013.