Inspired Evolution leads USD160M fresh co-investment round to recapitalise Red Rocket Group – a leading independent power producer in Africa

Inspired Evolution’s Evolution III Fund, in partnership with international co-investors Dutch Development Bank FMO and STOA Infra and Energy, has successfully closed the 75% acquisition of the Red Rocket Group demonstrating confidence in the existing management team and co-shareholders, BKI. The new buyer consortium will add USD 160 million of fresh capital to recapitalise and scale up Red Rocket to become one of Africa’s leading renewable energy independent power producers (IPPs).

Post its recent first close in March 2023, Red Rocket is Evolution III Fund’s first investment with a capital commitment of up to USD 80 million, and forms a central fit to its clean energy transition mandate and platform investment strategy. Evolution II, a 2017 vintage predecessor fund, already holds a significant shareholding in the reconfigured IPP platform having invested in 2020, and for the time being remains in the new buyer consortium.

Evolution II and III funds are managed by Inspired Evolution, an Africa-focused climate impact investment manager, that specialises in clean energy infrastructure, energy access and resource efficiency investments.

The ground-breaking partnership brings together seasoned professional teams with deep clean energy sector experience and proven renewable energy project development and auction conversion success to ramp up Red Rocket’s activities across Africa. Red Rocket’s tenacity and management skills set offers unique agility and differentiated strategies with best-in-class demonstrated renewable energy auction success. The team combines proven renewable energy technology selection with technical project development optimisation and innovation to offer full integration through its IPP platform solutions. The hands-on active value creation from Inspired Evolution and FMO and STOA as co-investors, are set to accelerate Red Rocket’s capabilities to deliver on its ambitious 3 GW+ target construction and operational project expansion plans over the next 3-4 years.

Red Rocket has been at the forefront of championing sustainable energy solutions, having achieved a series of remarkable milestones that underscore its unwavering commitment to clean energy. From its pioneering development, construction, and ownership of one of South Africa’s first PV projects (75 MW, Kathu), inking a groundbreaking land agreement with Eskom, and winning the lion’s share in an unprecedented win under the Round 6 auction of South Africa’s renewable energy independent power producer procurement programme (REIPPPP) with 440 MW of solar projects in 2022. In February 2023, Red Rocket reached financial close on three Round 5 REIPPPP projects, totaling 364 MW, and more privately procured projects are expected to reach the same milestone by the end of the year.

Red Rocket's journey continues to surge forward with its enduring partnerships as it brings much-needed renewable energy solutions to the people of Africa.

Christopher Clarke, Managing Partner at Inspired Evolution, said: “Backing a commercially astute professional team with demonstrated bid success to accelerate the deployment of utility-scale clean energy infrastructure in targeted countries across Africa, contributes to our mission. We share the vision with management for Red Rocket to become one of Africa’s leading private clean energy utilities.”

Steven Faure, Partner at Inspired Evolution added, "We are excited about the continued investment in the company and the robustness of the business model, where our new investor consortium will help propel Red Rocket to even greater heights."

Commenting on the partnership, Red Rocket CEO Matteo Brambilla said, "We are pleased to be partnering with Inspired Evolution and their Evolution II and III Funds, along with new partners FMO and STOA who bring sector expertise to augment our efforts in building Red Rocket into one of Africa’s premier long-hold utility scale IPP platforms."