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Investing in renewable energy brightens returns in SA

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Johannesburg - A programme that’s making South Africa the top destination for green-power investments across the continent and the Middle East is not only easing an electricity crisis: returns are beating those in bonds and stocks.

The Renewable Energy Independent Power Producer Procurement Programme secured about R196bn since 2011 and will attract another R550bn by 2020, according to data compiled by Bloomberg New Energy Finance.

With state-guaranteed contracts to buy the power over the next decade - and annual returns of as much as 20% - the project is a treasure trove for money managers and private equity companies seeking growth in an economy struggling to avoid a recession and the risk of a credit downgrade to junk. An index of rand-denominated debt has lost 23% over the past year in dollar terms, the biggest decline among 31 emerging markets tracked by Bloomberg.

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