The South African green investor who took on Trump – and won

Linda Mabhena-Olagunju is probably one of the few African investors, right now, who can crack a smile at the mention of Donald Trump. It is hard for Africa in the US president’s strange new world of turmoil and tariffs, in which the continent is set to lose billions of dollars’ worth of aid and support.

The reason? As a young lawyer, back in 2007, Mabhena-Olagunju locked horns with Trump’s legal team in court and won.

Not a bad scalp for a woman who grew up by candlelight in her grandparents’ village in South Africa’s Eastern Cape.

Mabhena-Olagunju was studying for her master’s degree in international and commercial law at the University of Aberdeen on the windy north-east coast of Scotland. The city, once the centre of the British oil and gas industry, now has a claim to being a green city; it even has a bus fleet that runs on zero-emission hydrogen.

The young lawyer, then in her early 20s, joined the legal team of the municipality-backed Aberdeen Renewable Energy Group in its first attempt to turn the mighty winds of the rugged Scottish coast into green energy.

The wind farm raised the ire of Trump. He claimed the wind turbines would spoil the view from his Trump International Golf Links in Balmedie and went to court to fight it – and lost.

It was a court victory that not only earned Mabhena-Olagunju a set of spurs, but also helped Aberdeen cement its green credentials. More than a decade later, the windmills of the Aberdeen Offshore Wind Farm are still turning.

“That was my first wind farm that I worked on and part of my job was opposing Donald Trump. And here I am again…full circle,” she says 18 years on with a wry smile.

“It’s true, because we’re sitting in a situation now where we are back to square one in terms of questioning whether climate change is real. Can you imagine?”

Bringing green energy to South Africa

Outspoken and feisty she may be, but you won’t see Mabhena-Olagunju in the society pages of magazines, nor the ubiquitous conferences. She wears her eminence lightly and is usually too busy working to give interviews. Even so, she was high profile enough to be recognised by Oprah Winfrey’s list of 20 of the most powerful women in Africa on her way to making a living out of canny black economic empowerment (BEE) deals, which are designed to redress the economic imbalances of apartheid.

Now, at the age of 41, she is a veteran of the tough and frustrating green energy investment business in Africa, where it can take more than five years just to close a deal.

In the small Northern Cape farming town of De Aar – population 42,000 – a huge forest of creaking white metal stands as testament to her dealmaking.

Turbines blow in the wind on top of a hill overlooking the town as they generate vital electricity; their sweeping yet strangely quiet blades have an 86-metre diameter.

These blades stand and serve alongside two solar photovoltaic (PV) farms generating 244 MW for the country’s hard-pressed power grid.

It is took years of hard work culminating in a deal put together by Mabhena-Olagunju under BEE legislation. The De Aar windmill deal was struck between China Longyuan – a subsidiary of the state-owned China Energy Investment, the biggest wind power builder in Asia; empowerment outfit Mulilo; and Mabhena-Olagunju’s own DLO Energy Resources.

From talks to turning turbines, it took about four years of negotiations and a year of document signing. The legal fees, alone, were estimated at more than a million dollars. There was a mountain of forms, not only for the compliance for the empowerment deal, but also environmental permits and tax forms.

The risk is high in 20-year projects and anything can go wrong: the wind can drop, the sun can go behind the clouds too often, the government can change, investors can drop out and the rules can change overnight.

If all goes well, a wind farm can be built in about 20 months, but that is just the beginning of the recouping your money.

“Then you start seeing a trickle dividend. A trickle dividend at connection in the first seven years is very minimal. It’s nothing to write home about. It’s not even enough to pay your operational expenses,” she says.

“The returns have been impacted because of competitive price bidding. Over the years the tariffs have gotten lower and that has meant less returns, especially if you are servicing debt, as we are with black economic empowerment, we have to service up a huge amount of debt,” she says.

“Over the years, the tariffs have come down, but you still need to service your lenders and remember what has happened in the past couple of years your interest rates have gone up, you’re paying more interest. Then your project is not making enough of a return for you to service your debt and have a trickle dividend to pay yourself.” 

The South African government announced the results of its latest auction for independent power producers at the end of December – and the news made for grim reading for the wind industry. While the government awarded “preferred bidder” status to eight solar projects, with a combined capacity of 1,760 MW, it demurred on selecting any new wind power capacity.

The limitations of BEE

The change to green energy is thus going to take a long time. And while BEE has helped Mabhena-Olagunju to get a foothold in the green industry, she says there are still limitations to the country’s empowerment framework.

De Aar may have windmills, but no one who can service or fix them.

“If there’s a fault on the wind farm, there aren’t electricians in the area that know how to deal with some of these things. How is that possible in a town like De Aar where it is the epicentre of renewable energy in the country?” she asks.

“The current stats from Irena says 85 million jobs are going to be created globally from renewable energy, but only 30% of the people can actually take up those jobs, or have the requisite skill set to take up those jobs. What happens to the balance of 70%? And in a country like South Africa, where our unemployment is 32% plus? People don’t have four years to sit back and do a degree or the money to even do that, right?”

Seeing a gap in training for black workers, Mabhena-Olagunju has backed an edtech startup to help South Africans get into green energy projects.

“We then created short courses, which offer in person and online and also utilising AI so that people can have a self-paced learning. It’s an ed-tech start-up that’s focused on the just energy transition and upskilling people. To date, we’ve trained 2,500 people.”

Branching out into Africa

In terms of investment, Mabhena-Olagunju is focused firmly on the rest of the continent Africa from her Johannesburg base. She also has a home in Nigeria, the land of her husband.

The next big project is underway in Zambia – building an onsite power plant for a copper mine.

“Zambia has been grievously impacted by climate change. A year or two ago, they had severe droughts and most of Zambia’s power was coming from hydroelectric power stations. And as those water supplies dried up, they started having a sharp issue with electricity. Zambia is now on the scramble, especially in the northern region, where most of the mines are massively trying to procure (power),” she says.

“But the big issue in Zambia, as with any African state, and as with any global state, the issue is grid infrastructure…there is a lack of transmission lines to basically transmit that power from point A to point B.” 

Mabhena-Olagunju believes grid infrastructure is the next big thing for investors in the power game in Africa. She also looks at the Zambian project with a swell of pride.

“It’s an African consortium, a wholly African consortium. It’s a collaboration between South Africans, Nigerians and Zambians. A wholly black development where Africans are finally developing their own projects from start to finish.”

Which brings us back to Donald Trump. In particular, his cold shoulder towards aid and investment in Africa.

“The truth is, in a way it presents an opportunity for Africa. I say this with links to the projects I am involved with now. We are going to need to start thinking inwards and stop with this attitude of always wanting to be saved. No one is coming to save Africa. We are our only hope. We need to snap out of this delusion that some big brother from the West is going to save us,” she says. 

“Why are we in a position where we are heavily reliant on external third parties to own and produce the technology, which is going to power our countries. When are we going to finally wake up and say enough, we’ll do it ourselves…I want to take the positive out of this and say it’s an opportunity to get our act together.”