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South Africa: Old Mutual sees stronger rand lifting green energy

By David Whitehouse
Posted on Wednesday, 10 March 2021 14:13

A stronger rand would boost South Africa's solar power industry. REUTERS/Thomas White

Investment managers at Old Mutual Alternative Investments (OMAI) plan to make further investments in South African renewable energy as the outlook for a stronger rand improves the sector's prospects, joint CEO Paul Boynton tells The Africa Report.

A stronger rand will increase the purchasing power of renewable-energy providers who source components from China. A healthier currency is “very useful,” especially for the solar power industry, Boynton says from Cape Town. “It’s a big plus.”

Boynton says the rand is likely to continue to be “very volatile”, but is likely to appreciate this year. OMAI predicts that South Africa will have a flat current-account balance in 2021, rather than the usual deficit. There has been a “material change” in the balance of trade as the country’s exports have held up well, while imports have suffered due to Covid-19, he says.