R300m renewable energy fund: Westbrooke’s swift success

Westbrooke Alternative Asset Management, a leading South African alternative investment manager, closed of its inaugural R300 million tax-enhanced renewable energy alternatives investment strategy, Westbrooke REAL.

The company achieved its target by raising funds from a number of private investors in just eight weeks. The capital will now be invested alongside South African businesses that install, operate, and own small and medium-scale embedded generation solar photovoltaic (PV) projects across the country.

“Westbrooke REAL offers investors a chance to participate in the crucial and rapidly growing renewable energy sector, via a diversified portfolio of solar PV projects. These projects are backed by long-term cash flows and power purchase agreements concluded with high-quality end-users,” explains Dino Zuccollo, head of product development and distribution at Westbrooke Alternative Asset Management.

Government has expanded the Section 12B tax incentive to stimulate investment, allowing investors to claim up to a 125% up-front tax deduction for all renewable energy projects put into operation for the first time between 1 March 2023 and 28 February 2025.

The unique Westbrooke REAL investment structure allows investors to enhance their investments, ranging from 200% to 250% of their invested cash, while maintaining ownership of the underlying solar PV projects and availing of the 12B tax benefits.

“Following the recoup of their initial capital, investors will continue to invest in a high-quality solar project that will deliver stable and predictable yields for up to 20 years. This is an attractive proposition for investors seeking long-term returns with a capital preservation focus,” Zuccollo continues.

Jonti Osher, head of the South African investment team, notes the Westbrooke REAL fund’s objective is to utilise the capital in diverse solar PV energy projects, working alongside trustworthy and experienced partners to unlock and expedite the roll-out of these initiatives.

“The successful closing of the 2024 fundraise in a record time is a notable achievement. The strong demand for allocations in the fund shows the allure of investment returns and the willingness of private investors to back solutions addressing the energy crisis in the country,” Osher adds.

The Westbrooke REAL fund targets investment in renewable energy projects with the following criteria: South African small-scale and medium-scale embedded generation projects (either grid-tied or hybrid systems), existing and greenfield solar projects, all backed by power purchase agreements and/or operating leases focusing on commercial, industrial, agricultural, and body corporate off-takers.

A key aspect of the strategy is to offer fast, innovative, and flexible equity funding to solar partners to expedite project roll-outs.

“Our partners will benefit from our collaborative approach and custom investment solutions, with the ability to move swiftly to facilitate accelerated growth and fast-track project execution,” Osher elaborates.

The fund will invest in projects that offer certainty of electricity supply and cost-effective electricity over the long-term to off-takers.

Zuccollo concludes, “Westbrooke REAL is an attractive proposition to investors as they receive inflation-beating investment returns over the long-term, while also contributing to the provision of secure and sustainable energy to South African businesses.”

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