Two new schools worth R68 million to be built in KwaZulu-Natal

Two new schools worth R68 million are expected to be built in KwaZulu-Natal.

Old Mutual Alternative Investments (OMAI), through its Education Investment Impact Fund of South Africa (EduFund), concluded a debt and equity investment worth R68 million. The money is geared towards developing two new schools in KZN in partnership with 100% black-owned education operator, Edinvest.

OMAI head of education investments Kelly Joshua said: “Edinvest have proven themselves to be outstanding social entrepreneurs committed to making a meaningful impact in their communities, and we couldn't be more excited to deepen our partnership.”

“The last two years have shown how important it is for the private sector to develop innovative ways to enhance capacity in the independent education sector and to drive economic transformation across market segments.”

The schools will be called Etham College in Hilton, north-west of Pietermaritzburg. EduFund will provide R54 million in debt and R14 million equity to a special purpose vehicle set up specifically to develop and own the two new schools, alongside Edinvest, who are investing R15 million of equity and will operate the new schools.

Old Mutual said the transaction was the second between EduFund and Edinvest, following EduFund’s investment into the Stedin College development in Port Elizabeth earlier in 2021. The development of the two new schools will serve the middle-income market and provide quality education to 1 050 pupils.

Old Mutual said, EduFund finances and invests in the education sector in South Africa across sub-sectors and market segments, aimed at earning an attractive risk-adjusted return for investors and positively impacting the education sector.

The Edinvest team is headed up by Nhlanhla Khambule and Thanda Ndabe, businessmen who have built their Artisan Training Academy (ADA) to be one of the country’s leading private vocational training institutions.

They opened their first two schools, Canaan College, in uMlazi, south of Durban, in 2019, and are well on their way to growing a national portfolio with the inclusion of Etham College and Stedin College, notwithstanding their steadfast pipeline of future developments.

OMAI made its first investment with Edinvest as part of the development of Canaan College, which serves the affordable market segment with a capacity of 1 600 learners, followed by Stedin College, and now Etham College.

Khambule said: “Our partnership with EduFund is framed to make quality, independent education more accessible and more affordable in under-served markets and across market segments.” While Joshua said transformation and investing in the growth of independent education operators was a critical part of what we do as impact investors.

“We deliver attractive commercial returns to our investors in a way that benefits society as a whole, and we can’t wait to see these schools completed and delivering the kind of results we have come to expect from our partnership with Edinvest.”