Investec-Backed Revego Lands $62 Million for South Africa Energy
Revego Africa Energy Fund raised 1 billion rand ($62 million) in its first capital-raising round since 2021 as the Investec Bank Ltd.-backed firm seeks to bankroll renewable power projects in South Africa.
The fund now has a portfolio of 3 billion rand, thanks to a 500 million-rand investment from UK development-finance institution British International Investment Plc, known as BII, and the same amount from South African pension administrator Alexander Forbes Group Holdings Ltd.
The fund can unlock a further 250 million rand from BII once another institutional investor matches that pledge, Revego Fund Managers Chief Investment Officer Ziyaad Sarang said in an interview.
The firm will use the funds to complete its investment in the 150-megawatt Springbok solar plant in the Free State province and to finance five wind-power facilities across the nation.
The open-ended fund began in August 2021, with initial backers including Investec, the Eskom Pension and Provident Fund — which manages the savings of workers at South Africa’s state-owned power utility — and UK Climate Investments LLP, a joint venture between the British government and Macquarie Asset Management Ltd.
While the fund has a regional focus, all of its 10 investments so far are in South Africa, which has the biggest renewable-energy industry in the sub-Saharan region. Its investments have allowed the fund to meet its target yield of inflation plus 5% to 7% since inception.
“We have returned 600 million rand of dividends in four years and that is resonating with institutional investors,” Sarang said.
Sarang has spent more than 25 years working on transactions in the power, mining and infrastructure sectors, was head of infrastructure at Standard Bank Group Ltd. and now runs fund initiatives at Investec.
He plans to double the fund over the next two years to 6 billion rand, and increase that further by 2029.
“In the next three years, I want to be at 10 billion rand,” Sarang said.
Revego has already built a pipeline of as much as 10 billion rand in operational green projects in South Africa, and a further $100 million elsewhere on the continent, but plans to keep its attention local for now.
“We are retaining the focus on South Africa because the pipeline is so big,” he said. Sarang expects Revego will have at least one sub-Saharan project outside of South Africa on the books “in the next 24 months.”
The continent’s most industrialized nation is gradually retiring coal-fired plants it currently depends on to generate the bulk of its power, and intends utilizing a range of technologies from gas to renewables to meet future demand, the government’s latest blueprint shows.
Once the fund reaches assets under management of $750 million to $1 billion, Revego would consider a listing.
At that size and with a sub-Saharan African focus, “then I think that would be ideal time for listing,” Sarang said.
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Revego Fund Managers (Pty) Ltd. is an authorised Financial Services Provider (FSP number 47561)