Lereko Metier Sustainable Capital Fund

The Lereko Metier Sustainable Capital Fund (LMSC) is a pioneering sustainable capital fund that invests in the renewable energy, energy efficiency, water and waste management sectors.

LMSC is a resource efficiency and clean technology private equity fund that achieved a final close in late 2013 of R690 million with support from FMO, DEG, the Public Investment Corporation of South Africa, the International Finance Corporation and the Transnet Retirement Fund. Subsequently, aggregate funds under management, including co-investment pools, have more than doubled to a level of R1.4 billion as at June 2016. The increase occurred due to significant co-investment opportunities being secured and executed.

The Lereko Metier Sustainable Capital Fund (LMSC)

The fund exceeded initial targets and obtained support from benchmark local and international institutions.

Lereko Metier Sustainable Capital Fund specialises in investments in development capital and project expansion. The fund does not invest in unbankable technology. It prefers to invest in middle market and later stage investments. It seeks to invest in clean technology projects and businesses with a focus on energy efficiency, renewable energy, water, waste management sectors, water testing, waste renewable, water purification, water supply, sewage treatment system, sanitary services, electric power by wind and solar energy, and projects supporting the region’s development objectives and environmental commitments.

It targets investing across South Africa and Sub-Saharan Africa. The fund seeks to invest an equity investment between $3 million and $20 million in its companies. The fund’s maximum investment is 15% of the fund size. It seeks to take equity stakes between 20% and 60%. The fund prefers to acquire control and significant minority positions.

LMSC targets investments that provide social and environmental benefits, as well as returns on financial capital. The fund combines the benefit of leveraging an established private equity house as well as a focused team with a leading renewables, development and clean/green track record in the region.

The investment mandate is balanced between renewable energy projects and growth capital investments in other resource efficiency sectors, with a unique blend of team skills, experience and networks allowing for a compelling proposition to entrepreneur teams and an exciting new category for investors.

The fund has invested in the 50MW Bokpoort concentrated solar power (CSP) plant in the Northern Cape. This is the largest project in the second round of FMO Energy’s Renewable Energy Independent Power Procurement Programme (REIPPP). In a second completed investment, LMSC joined as an equity partner with solar photovoltaic developer, AE-AMD, which successfully closed two projects under the first round of the REIPPP. The fund has also successfully partnered in three selected wind projects in the third round of the REIPPP.

Target Impact for The Lereko Metier Sustainable Capital Fund

The Fund is expected to have a significant development impact on its investees by:

• Reduction of CO2 and other GHGs by investing in renewable energy and cleaner technology projects, thus contributing to reducing carbon emissions;

• Supporting business with a focus on climate change and cleaner technology;

• Supporting regional developmental objectives and environmental commitments for investment in clean and efficient energy, water and waste sectors;

• Stimulating job creation through supporting job growth in new sectors;

• Implementing best practice ESG at the Fund and investee level.

Contact DTC for more information & assistance on funding through the Lereko Metier Sustainable Capital Fund.