H1 Holdings completes R1.9bn Kenhardt equity transaction

H1 Holdings has partnered with The Standard Bank of South Africa Limited, acting through its Corporate and Investment Banking division to reach financial close on a long-dated R1.921bn equity funding facility. The transaction facilitates the exit of an investment provided in July 2022 by British International Investment (BII); Industrial Development Corporation (IDC); and Norfund, which had enabled H1’s acquisition of equity in the Scatec Kenhardt hybrid facilities.

The transaction underscores the critical role of climate and development finance institutions in driving the energy transition and provided significant additionality and impact.

BII, IDC and Norfund played a catalytic role in the project’s early stages, enabling investment in South Africa’s first utility-scale hybrid facility through a novel procurement programme. The transaction returns R1.9bn (NOK1.07bn; US$110m) to investors, delivering strong returns over the investment horizon while freeing capital for reinvestment in new projects.

According to Saad Ul Islam, Investment Director at BII, “BII is committed to supporting Africa’s just transition by ensuring our capital is used efficiently to support investees and mobilise private climate finance investment. This transaction is a great example of that approach.” Christo Fourie, the Head of Energy at IDC added, “We are proud to have backed H1 in bringing Kenhardt to close and remain committed to supporting the company’s growth journey.” Finally, Bjørnar Baugerud, Head of the Norfund-managed Climate Investment Fund, noted, “Our responsible exit from Kenhardt illustrates how climate finance can be an effective instrument for the global energy transition.”

Beyond Kenhardt, H1 is strongly aligned to BII and Norfund, who remain investors in its renewable energy platform, H1 Capital.

While the initial funding was highly catalytic, with the Project operating stably and with a shifting macroeconomic environment, H1 sought to expand its funding base and secure more sustainable long-term equity funding. Building on a longstanding partnership across multiple H1 projects, Standard Bank’s Equity Finance team delivered a tailored solution with efficient execution, setting a new benchmark for performance and collaboration.

“We are grateful to the Existing Investors for their ongoing support of our business. Kenhardt, built around a novel technical solution, would have been difficult to close without their partnership,” said Jonathan Muller, Head of Asset Management at H1. “The Kenhardt equity transaction demonstrates H1’s ability to manage assets responsibly, deliver strong returns to stakeholders and secure substantial new investment. Replacing development finance with long-dated bank funding underlines H1’s growing maturity and bankability, which will support expansion into private power and transmission infrastructure.”

H1 co-developed and co-operates Kenhardt with Norwegian renewable energy company, Scatec. The Project ranks among the world’s largest hybrid solar PV and battery storage facilities. With 540 MW solar energy and 225 MW / 1140 MWh of battery storage, it supplies 150MW of dispatchable power daily from 5am to 9:30pm in South Africa. The Project avoids an estimated 870,000 tons of CO2 emissions annually and highlights how battery storage can enhance the role of solar energy across Africa.