Climate Fund Managers (CFM) will invest $38.5m in the 4.8 megawatt (MW) Bronkhorstspruit Biogas Project in Gauteng, South Africa, with the aim of expanding its capacity to 9.8 MW.
Funding will be granted via its managed funds Climate Investor One and Climate Investor Two.
The project, owned by South African firm Bio2Watt Energy, intends to produce biogas from the breakdown of at least 240,000 tonnes of organic waste per year.
South Africa currently sees approximately 3.67m tonnes of waste annually not being collected and treated through formal waste collection systems, which results in illegal dumping.
Waste management forms a significant challenge for many African countries, resulting in water pollution and emissions of toxic gases, therewith negatively affecting climate and public health, commented Sebastian Surie, Regional Head for Africa and CFM.
Waste that has been earmarked for compositing still ends up in landfills, resulting in the release of potentially harmful liquid seepage and the leaking of methane gas in the breakdown process.
By developing waste-to-energy projects, BEH sources organic waste streams from local areas and produces biogas for green energy production and organic fertiliser via anaerobic digestion (AD) a natural process where biomass is broken down by micro-organisms in the absence of air.
According to CFM, the project provides an opportunity to contribute to a circular economy investment platform, a sentiment echoed by Sean Thomas, CEO of BEH, who said, BEH looks forward to the future with partners such as CFM to offer green waste-to-value solutions to industries in South Africa and the rest of the continent.
Following the conversion of around 240,000 tonnes of organic waste per annum to renewable baseload power, it will be off taken by BMW South Africas Rosslyn plant in Tshwane, Gauteng.
The plant will mitigate up to 48,000 tonnes of carbon dioxide (CO2) per annum by diverting the organic waste from landfills.
The Climate Investor One and Climate Investor Two investments will allow us to build a waste-to-value platform for Africa, tapping into the significant business opportunity that the sector has to offer, whilst at the same time providing a mitigant for these issues, added Surie.
In addition to the BBP plant, BEH is working with South African Breweries on a waste-to-value project that will generate 37.5 GWh (gigawatt hours) of renewable electricity annually from the Cape Dairy Biogas Plant once it reaches commercial operation.