Black River Asset Management has committed $70 million to a coal-based energy initiative in Africa with White Energy, an energy efficiency technology provider.
White Energy has contributed approximately $31 million to the venture, but will hold a 51 percent stake in the resulting compnay, which will further commercialise White Energy's coal efficiency technology across Africa and develop and operate coal upgrading plants.
White Energy’s technology allows coal waste to be converted into higher grade coal, which is easily transportable and chemically stable.
Black River will make an upfront payment to White Energy immediately upon establishment of the new company. White Energy will also receive an ongoing royalty stream from all projects, in addition to profits generated from its equity investment.
Any equity contributions to the company will be funded 66 percent by Black River and 34 percent by White Energy.
This is the second move to address energy efficiency in Africa in a week that has seen Denham Capital invest $150 million in South African renewable energy firm BioTherm Energy.
Black River, a subsidiary of global food conglomerate Cargill, has been a shareholder in White Energy for more than two years. The Black River Group manages $8.9 billion globally; its invesmtent strategies include private equity, emerging markets and commodities investing.