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You're listening to Strictly Business
Podcast with Lindsay Williams.

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91 is pleased to announce that its SA
Infrastructure Credit Fund has reached a

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significant milestone growing to £2
billion

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in assets under management since its
launch.

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Let's talk about this now with Tamzi
Ramukuzi, Investment Specialist,

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Emerging Markets Alternative Credit at 91
in Cape Town.

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Tamzi, first of all, congratulations on
achieving this milestone.

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I want to talk to you about one particular
sentence in the press release which you

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kindly sent me.

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It said, this strong update reflects
increasing institutional investor appetite

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for real

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world impact and diversification through
high quality infrastructure debt

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strategies.

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It's very important.

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I want to ask you a question that's got
one sort of controversial element to it.

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Why are these institutions investing in
your fund?

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Is it to make money?

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I think obviously.

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Is it to make a difference?

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I hope so or is it just to look good in
the annual report?

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Lindsay that's a very interesting
question.

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I think it is a number of factors.

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I mean we have seen changes in regulation
to allow institutional clients to invest

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a larger or a significant portion of their
assets up to 45 percent in infrastructure

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and

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you know given the state of infrastructure
in the country.

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Over the years, there is a requirement or
a need to invest in infrastructure.

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But also, I mean, the money that is being
invested with us or the assets that are

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being invested with

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us in order to help fund people's
retirement.

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So it is a combination of factors.

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And that's what makes this SA
infrastructure investment different from

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other investments that you could do

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or access in the market, is that it does
play that role.

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in benefiting and helping the economy as
well as improving the infrastructure in

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the country that can

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benefit the same investors in those funds.

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Another key word in the piece that you
sent is availability,

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because if there's no availability and
there's money, then there's no point.

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So the fact that you've got a pipeline,

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the fact that there are projects that need
to be funded is terribly important and

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these projects obviously have to

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be viable.

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and relevant, Tansy, but your pipeline, I
presume, is quite buoyant.

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No, I mean, that is correct.

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I mean, we have seen a number of reforms,
particularly through the energy space,

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and that has led to projects being
implemented in the corporate and

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industrial

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space, where we're seeing power stations
being constructed for the purposes of

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selling.

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to these uptakers.

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So this is a new market that before
regulatory changes or reforms wouldn't be

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available.

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So from an investor point of view,

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that means that there is access to be able
to invest in those particular

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opportunities which wouldn't

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necessarily exist a couple of years ago.

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Currently, at the moment, we are seeing
other sector reforms being implemented.

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in the transportation space, allowing for
third-party operators, particularly on the

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rail.

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And that is also another area that
wouldn't have necessarily been available

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for a fund such as

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ours to invest in.

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So it is particularly exciting to see the
growth that we are seeing in the market as

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a result of some of the

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reforms that are being implemented.

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And that does provide for a healthy
pipeline to deploy assets to down the

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line.

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What about your relationship with the
public sector?

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Has it been good?

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Is it essential?

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No, I mean, that is quite important,
right?

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If you look at the SA landscape right now,

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the main custodians of infrastructure is
still public entities, so the state-owned

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entities.

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If you look at electricity, yes, there has
been an introduction of renewables, but

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ESCOM still plays a critical role in
providing electricity.

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You talk about logistics.

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Transnet is a key player there.

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And yes, there are reforms coming through,
but as it stands, they are still the

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largest player in that space.

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And having a relationship with them and
being able to invest in them is something

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that is quite important.

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And if you go a little bit further in
terms of road and airports that we have in

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the country, it's a similar aspect.

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So being able to engage with the public
sector.

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in this is quite important because the
solution to infrastructure does need both

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public sector as well as

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private sector participation.

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Now, I love examples, people love
examples.

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In my experience, it tends to illustrate a
strategy.

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So I want you to choose one.

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You mentioned Lesotho Highlands, Daal Wind
Farm, Terarko,

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the leading provider of data centres in
South Africa, three very, very different

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projects.

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Maybe you want to choose one or another
one outside of the ones that I've just

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mentioned,

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because I'm interested in what happens
from the moment you identify it to the

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moment it gets up and running.

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Can you help me with that?

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No, exactly.

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I mean, so we have invested in the Aar
Wind Farm.

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It comprises of two, there are two
separate projects.

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There's one, which is 100 megawatt, which
is an onshore wind farm.

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And then there's another one, which is 144
megawatt wind farm.

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And these projects were part of the
renewable IPP program in South Africa.

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They were part of the round three.

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How we came about having this exposure is
that it came through the relationship that

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we have with the banks.

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So it was a syndication opportunity.

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So we reached out to the banks that we
have a relationship with, in this case,

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NetBank,

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to syndicate that particular exposure to
us.

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I mean, it is quite important.

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I mean, when you look at what this project
does, they're generating clean energy,

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which is sufficient to...

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to provide about 80,000 homes on average.

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And this is clean power that's being added
to the grid,

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which is quite important given the goals
that the country has in order to achieve

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net zero down the line.

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So it is quite important projects that
come through.

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The process itself, I mean, it's very
hands-on.

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We receive information around on the legal
side,

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the contracts in terms of the power
purchase agreements.

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that the wind farm has with the utility
with ESCOM and we have to review that and

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be

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comfortable that it is the risk allocation
is appropriate and then we also look at

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the technical

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aspect of the project that it is
performing and that the wind resource in

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the area is good in

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order for the project to generate
sufficient electricity.

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It is a very detailed process that we
follow and we review

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the documents thoroughly to get that
comfort.

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So it is quite good to support these
projects,

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given the role that they play in providing
electricity.

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You've given us a lot of high level
information, Tanzee, terribly important,

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of course.

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But people also like to know what's
happening at ground level.

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I mean, how many South Africans, for
example, have been employed?

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How many people have been transported?

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How much energy has been generated to how
many homes.

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Can you give me an idea?

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Give me some numbers, please.

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No, definitely.

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So, I mean, when we look at the portfolio
overall, I mean, it has, looking at the

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companies we've invested in,

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they've sustained about 230,000 jobs.

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And when you look at the investments we
have in the transport space, particularly

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with the aircrafts,

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particularly in the aviation space, as
well as the airports that we have

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financed,

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There are about 3.8 million passengers
that are transported.

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And last but not least, looking at the
energy aspect in aggregate, yes,

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I did speak about earlier on, but looking
at the assets we have in that portfolio,

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it's about

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1 million megawatt hours of clean energy
that is generated.

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And this is powering on average about
380,000 homes.

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Very good.

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Now, if I was an institutional investor,
I'd say, right, this all looks very good,

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Tansy.

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But on the other hand, am I stuck for 20
years in this investment or can I get out?

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What's the liquidity level?

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Can you address that potential question,
please?

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No, definitely.

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So, I mean, the portfolio itself or the
fund is structured or considered as an

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evergreen

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portfolio.

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And what we do offer is a 5% liquidity per
quarter.

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So that's 5% of the net asset value of the
portfolio.

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And per annum, it's limited to 20%.

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So that is what is available to all
investors in the portfolio, not

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necessarily

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20% or 5% of that particular investor's
investment.

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So it is 20%.

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per annum or five percent per quarter of
the portfolio's net asset value.

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This may be a little bit of a personal
business question here Tunzey but are your

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investors happy with the returns

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that they've got so far?

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So I mean the portfolio is going through a
ramp up currently

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and the returns have been good but you
know the nice thing is that we have been

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running this portfolio for

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almost two years.

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Now, and the returns, when you compare to
benchmark, they have been ahead of

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benchmark.

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So, yes, as you said, it's a bit of a
personal one, but from our side, from a

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portfolio point of view,

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we are quite pleased with how the
portfolio has been performing.

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Well, you sound happy with everything.

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And you say right at the end of the press
release, you say,

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we continue to see a robust pipeline of
new deals and are excited about the role

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this fund plays in nation building and in

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client.

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portfolios.

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Is that a fair assessment of what's
happening now and in the short to medium

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term?

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Yeah, I mean that is a fair assessment.

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I mean there is more changes that are
happening particularly on the reform side

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which helps in terms of

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seeing pipeline projects that we can
potentially provide funding to

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and you know it means that we can be able
to diversify the portfolio which for us is

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quite important

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because our offering is that the
infrastructure investment should be on

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a broad approach, not necessarily thinking
through one thematic or being concentrated

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in one area.

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So the future for us looks very exciting,

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and the projects that are coming through
keeps us very excited to be an investor in

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the infrastructure space.

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I said in that question, short and medium
term, but also the long term, because

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these are long term projects.

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Tanzi, thank you very much for your time
and your explanations.

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Tanzi Ramakosy, investment specialist,
emerging market alternative credit.

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And he was talking about the SA
Infrastructure Credit Fund.

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The views and opinions expressed in these
podcasts are those of Lindsay Williams and

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various contributors and do not reflect
the policy,

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position or opinion of any other agency.

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organization employer or company
associated with

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strictlybusinesspodcast.com assumptions

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made on the analyses are not reflective of
the position of any other entity other

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than the speaker or the author and

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since we are critically thinking human
beings these views are always subject to

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change revision and rethinking

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at any time please do not hold us to them
in perpetuity