THE VANTAGE GREENX FUND

Vantage Capital launches The Vantage GreenX Fund with total commitments of R2.2bn ($215m)

Johannesburg, South Africa (28th November 2013) – Vantage Capital, Africa‟s leading mezzanine debt provider, today announced the launch of its inaugural renewable energy debt fund – The Vantage GreenX Fund (“Vantage GreenX”).

Vantage GreenX (an acronym for „Green Electricity‟) was established to play a meaningful role in the power and renewable energy sector in South Africa. Total commitments of R2.2bn ($215m) were raised from a number of leading South African pension funds. The fund will be managed by an experienced Vantage team with project finance, banking, debt capital markets and technical expertise. Vantage GreenX seeks to capitalise on three major trends: (i) the continued commitment of the South African government to reducing the country‟s carbon footprint through the rollout of a large-scale renewable energy program, (ii) regulatory pressures such as Basel III which encourages banks to sell-down their long-term debt exposures, and (iii) expansion of African infrastructure, in particular energy infrastructure, to support sustainable economic growth.

As part of the South African‟s government‟s broader initiative to diversify the country‟s energy mix 17,800MW of new capacity brought online by 2030 will come from renewable energy sources according to the Integrated Resource Plan requiring colossal amounts of funding. In addition to the banking sector in South Africa, institutional investors will need to play a major role in the financing of these programmes to ensure the ambitious targets set by government are achieved. This creates opportunities for specialist fund managers like Vantage.

The GreenX fund‟s mandate will be to invest in the senior debt of projects that were awarded as part of the South African Renewable Energy Independent Power Producer Procurement Programme (REIPPP). The fund will seek to invest in projects with strong sponsors, good locations and technologies with relevant commercial track-records. In addition to these requirements the fund will also take into consideration the manner in which the project is structured so as to ensure that local communities do in fact benefit from the projects that Vantage are investing in. Luc Albinski, the Managing Partner of Vantage Risk Capital commented: “According to Frost & Sullivan (a leading market research firm), South Africa is on track to becoming one of the fastest growing renewable energy markets in the world. In 2012, renewable energy accounted for less than one percent of South Africa’s energy mix; Frost & Sullivan forecasts this will grow to 12 percent in 2020. Renewable projects are typically 70-80% debt funded so the renewable sector represents a massive opportunity for an alternative debt-oriented investor like Vantage. Vantage is not limited just to South Africa but will consider opportunities north of our borders in 2014 capitalising on our well-established African networks.”

The Vantage GreenX Fund will launch with seven project investments in its carefully vetted portfolio. These projects were all awarded during the first or second bidding rounds of the REIPPP. The portfolio comprises of both solar and wind projects from a variety of different suppliers and sponsors. The portfolio is also geographically diverse with projects located across the country in the Eastern Cape, Northern Cape and Limpopo. In addition to these seven projects the fund will also seek to invest in a few more projects with unallocated capital.

Warren van der Merwe, the CFO for the Vantage Group described the fund launch as “a landmark event not only for Vantage but for the renewable energy industry in South Africa as a whole. The launch of this fund represents the entry of a new institutional investor base into this space, which is an important development towards resolving a potential debt deficit facing government‟s ambitious renewable energy programme.” Vantage Capital currently manages two mezzanine debt funds with total commitments of approximately R2.85bn ($279m). The GreenX Fund will bring funds under management at Vantage to over R5bn ($489m).

Ashley Benatar, the Managing Director of Vantage Debt Capital markets, said “GreenX tops off a busy year for Vantage Debt Capital Markets that arranged more than R3 billion ($293m) of funding in 2013 including a R1 billion ($98m) domestic medium term note programme for Trustco Group Holdings Limited on the JSE and a R2.5 billion ($244m), unlisted, OTC, asset-backed note program for GreenX.”

About Vantage Capital

Vantage Capital Group is a majority black-owned fund manager and investment firm. The Group was established in 2001 with funds under management of R150m and now currently manages over R5 billion ($489m). In addition to managing technology venture capital, mezzanine debt and renewable debt funds, Vantage also provides advisory and origination services through its debt capital markets division and makes proprietary investments using its balance-sheet capital.

Capital for the Vantage GreenX and the Vantage Mezzanine funds has been sourced from over 30 institutions including many leading African pension funds like the Public Investment Corporation (PIC) in South Africa and the Debswana Pension Fund in Botswana, development funders such as the Development Bank of Southern Africa (DBSA) and the Norwegian Fund for Development (Norfund), and private sector endowments such as the Kellogg Foundation from the United States.
Vantage has offices in Johannesburg and Cape Town and in addition to its home market in South Africa, targets debt opportunities in a number of high-growth African countries including Ghana, Nigeria, Ethiopia, Kenya, Tanzania, Uganda, Zambia, Botswana and Namibia.

Website: www.vantagecapital.co.za

For more information contact:
Warren van der Merwe, Group CFO- warren@vantagecapital.co.za
Luc Albinski, Managing Partner- luc@vantagemezzanine.com
Ridhaa Ahmed, Associate- ridhaa@vantagegreenx.co.za