Renewables Firm Mainstream Hires Rothschild to Seek Investors

(Bloomberg) -- Mainstream Renewable Power has hired Rothschild & Co. to find an investor for its pipeline of South African renewable energy projects, according to people with knowledge of the matter.

Japan’s Mitsui & Co.-backed group, with about 12 gigawatts of solar and wind projects in development in the most industrialized nation on the continent, seeks a joint venture partner for its South African business, said the people, who asked not be be identified as the information is still private. The size of the stake has yet to be determined, one of the people said.

“Mainstream does not comment on speculations in the market,” a company spokesman said. “However, it is standard practice for global renewable developers to continually explore opportunities for investment, divestment and partnership.”

Rothschild declined to comment.

In 2021, Aker Horizons acquired a majority stake in Mainstream, and in 2022, Mitsui joined as an investor. The current deal is for an investor for its South African assets. 

South Africa and other countries on the continent have seen increased deal activity around renewable energy assets.

Old Mutual-owned African Infrastructure Investment Managers Ltd. is in talks with companies including BlackRock Inc. to sell a stake, people familiar with the matter said last month. Another South African firm, Red Rocket, hired Goldman Sachs Group Inc. to consider strategic options for its assets, Bloomberg reported previously.

Mainstream is currently constructing a 97-megawatt solar farm project that reached financial close in November 2023 and anticipates reaching financial close for another project, with a private power purchase agreement, the company said.

South Africa’s government auction system to buy clean power from independent producers was once the world’s fastest growing program, before stalling due to political interference, a shortage of grid connections and legal suits. 

That might change, with Energy and Electricity Minister Kgosientsho Ramokgopa pledging earlier this month that he will be “ultra-aggressive” about sourcing more capacity.

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