Revego's CIO on Why Africa's $120 Billion Infrastructure Gap Could Double Without a Secondary Market
In this episode of Uxolo: In-Depth With, Jessica Brown speaks with Ziyaad Sarang, Chief Investment Officer at Revego Fund Managers, about the fund's unusual place in African infrastructure investing: it buys operating renewable energy assets and holds them for the long term.
Revego Fund Managers
Revego is a Johannesburg-based, rand-denominated permanent capital vehicle built on private equity principles. Instead of funding greenfield development, it buys utility-scale renewable energy assets that are already operating. That gives developers and private equity funds a credible exit, and gives pension funds and insurers long-term exposure to infrastructure. Founded around five years ago, the fund has grown from roughly $100 million to around $160 million in AUM. It has returned just over 50% of paid-in capital to investors (DPI of about 0.5x) and says it has hit its CPI+5–7% dividend yield target every year since inception.
Key themes
The Missing Half of the Market
Development finance institutions (DFIs) are overwhelmingly focused on greenfield projects. Ziyaad's argument is that this covers only one side of the coin: without buyers for operating assets, capital stays locked inside projects and developers can't recycle it into new ones. Revego exists to be the credible buyer at scale, and he calls on DFIs to back both primary investment and the secondary market. He singles out British International Investment as the one DFI he sees doing so.
The Gap That's Doubled
Ziyaad recalls Africa's infrastructure deficit at around $60 billion a year before COVID. The latest figures he's hearing put it at $100–120 billion a year. If the industry keeps doing what it has always done, he warns, the figure could reach $240 billion, and sooner than people expect. His verdict: "We have to change something."
A "Broken" Model: 12-Year Funds, 30-Year Assets
Private equity funds that invest in African infrastructure typically need to exit in 7 to 12 years. A renewable energy plant lasts around 30. Revego's answer is to buy and hold for 20 years or more, offering steady cash flow and dividends every six months rather than a single exit return. Matching asset life to investor horizon is the heart of the thesis. It also takes a lot of education: pension funds, asset consultants and DFIs still need convincing, and "it's a mandate issue" isn't an answer when the gap keeps growing.
How the Model Works in Practice
Revego's first four acquisitions came from a South African private equity fund reaching the end of its life: a concentrated solar power plant and three wind assets, bought as a portfolio. The seller returned the capital to its LPs, mostly DFIs, who could recycle it into new funds. Sellers were comfortable because Revego's team brings decades of combined experience and has strong institutional backers, so the deal would be completed.
Scale Is Everything
Revego's minimum ticket is $15–20 million, and the logic runs through the whole conversation. Long-term investors want scale, so Revego needs scale. A study with Mobilis and Wood Mackenzie found around 90% of the investable operating renewables market in sub-Saharan Africa sits in South Africa. Outside it, projects are small (mostly under 50MW, with Lake Turkana the major exception), non-programmatic, and expensive per megawatt, which pushes up the cost of power.
What South Africa Got Right
South Africa's renewable energy programme gave the market a government-backed, programmatic pipeline. Private projects that once topped out around 75MW are now reaching 300–400MW without a government offtake. Capital, Ziyaad says, "takes the path of least resistance". Give it a clear pipeline and an enabling environment and it will come.
Currency, Country Risk and the Investor Journey
Early cornerstone investors included the Eskom Pension and Provident Fund, UK Climate Investments and Investec. More recently Revego closed R1.25 billion from Alexander Forbes alongside British International Investment. International fundraising has been harder. A rand-denominated fund with exposure to a single offtaker and a sovereign backstop faces country and currency concerns, and Ziyaad's view is that those concerns fade once the fund reaches scale.
The Road to $1 Billion, and Beyond
A strategic merger with H1 Capital would add 26 operating assets to Revego's current 10, taking AUM to around R13 billion ($700–800 million) over the next 18–24 months. A billion dollars of AUM is the point at which an IPO would be seriously considered. International investors tend to see the $750 million to $1 billion range as the sweet spot.
What a Mature Market Looks Like
Ziyaad's five-year vision is a large, listed infrastructure vehicle (debt or equity) on the continent, providing transparent pricing and liquidity. He notes that the UK's AIM market has more than 20 listed infrastructure yieldcos, while Africa has none at scale. The payoff would be a lower cost of capital, a smaller illiquidity premium, and lower tariffs.
Episode takeaway
Africa doesn't lack investable infrastructure. It lacks exits, patient capital that matches the life of the assets, and projects at scale.
Revego's model shows that when infrastructure investing is:
- Backed by long-term capital that matches 30-year asset lives
- Supported by a deep secondary market where capital can be recycled
- Built around programmatic pipelines rather than one-off projects
- Mandated by DFIs to support both primary and secondary investment
…it can unlock trapped capital, lower the cost of power, and begin to close a gap that's growing faster than it's being filled.
Infrastructure outlasts election cycles. The capital behind it should too.
