The capital is already built: why the secondary market matters for Africa’s energy future
Ziyaad Sarang, Head of Fund Initiatives at Investec and Chief Investment Officer at Revego Fund Managers, on recycling capital to build faster.
Closing Africa’s infrastructure investment deficit will take more than financing new projects, and the answer may lie partly in the assets already built and running. That was the argument Ziyaad Sarang brought to the Africa Energy Forum.
Sarang made the case for the secondary market, the business of owning and operating renewable energy assets that have already been built. Primary investment in new projects is not enough on its own, he said. By buying into established projects with a proven track record, a manager like Revego frees up the original developers and early equity holders to take their capital out and recycle it into the next wave of projects. That recycling, he argued, is part of how Africa builds faster.
On bringing development finance institutions and pension funds in alongside one another, Sarang said institutional investment in infrastructure was barely a conversation a decade ago. What changed was the arrival of large, investable projects and an enabling environment, with South Africa’s renewable energy programme the catalyst. That programme, which began some fifteen or sixteen years ago, set the rules of the game, created a clear path to liquidity and built a market deep enough for investors to participate and later exit as they recycled capital into new projects.
The Revego Africa Energy Fund, which Sarang’s team manages, has been backed since its launch by Investec, both a shareholder in Revego Fund Managers and an investor in the fund, alongside institutional names including the Eskom Pension and Provident Fund and British International Investment. It is the kind of platform Sarang sees as central to building a liquid secondary market that institutional investors across the continent can rely on.
Sarang was glad the forum had returned to Cape Town. The engagement had been excellent, he said, and it was somewhere he would happily see host AEF every year.
