By Shruti Menon Seeboo
Against the vibrant and collaborative atmosphere of the PIAfrica conference in Mauritius on the 11th and 12th of February 2026, Mitesh Pema, Fund Principal at Mahlako Financial Services, presented a compelling blueprint for the next phase of African infrastructure. As a key architect behind the Mahlako Energy Fund—a pioneering vehicle dedicated to the energy value chain—Pema occupied a unique position at the summit. While the broader dialogue focused on the massive $2 trillion in assets held by African institutional investors, Pema’s contribution was grounded in the practicalities of deployment: how to move capital from a balance sheet into a solar plant, a gas project, or a green hydrogen facility in a way that prioritises both commercial viability and radical economic transformation.
For Pema, the conversation around energy in South Africa has moved past mere crisis management toward a more sophisticated era of liberalisation and decentralised power. He describes a landscape that is rapidly evolving from a state-led monopoly to a dynamic, multi-player ecosystem where the role of institutional capital is paramount. “African pension funds should be relevant to long-duration energy projects. So, I think the underlying mechanisms are already in place. Energy and infrastructure projects typically come with long-term revenue contracts that underpin the economics of a project,” he explains. This inherent alignment between the long-term liabilities of pension funds and the long-dated cash flows of energy assets forms the bedrock of his investment philosophy.
As a fund manager, Pema views his role as a translator of risk. “As an asset manager, our main function in that role is to ensure appropriate risk allocation through contracts to the parties best able to manage those risks,” he remarks. For many pension funds, the barrier to entry has traditionally been a lack of familiarity with the technicalities of project finance. “So, really, the mobilisation of the capital is to help pension funds and decision-makers within pension funds understand that risk profile. Because we do believe that the ultimate risk and reward balance is tipped in favour of the APSF [African Pension and Sovereign Funds].” By demystifying the “black box” of infrastructure, Mahlako aims to bridge the gap between cautious savers and the massive funding requirements of the continent’s power grid.
The acceleration of private markets in Southern Africa has shifted the focus of institutional investors beyond simple spreadsheets. Pema notes that in the South African mid-market infrastructure space, impact is no longer a secondary consideration. “Infrastructure is core to economic growth and job creation. Without infrastructure, other value-adding industries cannot operate. Manufacturing, financial services, etc. So, for us, again, infrastructure and energy has a natural impact outcome. So, when we evaluate that, we often balance financial returns with the economic impact,” he observes. This is not philanthropy, but a recognition that the sustainability of a return is tied to the health of the broader economy.
This “downstream” focus is central to Mahlako’s evaluation process. “Because infrastructure is foundational to other activities, we’re always focused on ensuring that that service provided by the infrastructure is of value-creating downstream. So, in that context, ensuring that power is affordable and cost-reflective. Ensuring that transport results in costs that are appropriate to the end-user of that freight commodity,” Pema explains. This ensures that the benefits of an investment are not siloed. “And so that the benefits of that impact are realised throughout the value chain, and not just with the investor in that infrastructure asset. So, impact is, when it comes to infrastructure, it’s part and parcel of the returns generated by that asset.”
A recurring theme at PIAfrica 2026 was the use of blended finance models to de-risk ambitious projects. Pema offers a nuanced perspective on where this capital is most effective. “For us as a manager, I think that is in the earlier stage development of the concept. But in construction, we really look to make sure that that project is feasible on its own standing, and not reliant on cheaper capital or concessionary finance to make the economic viability of the project work,” he argues. To Pema, true sustainability requires a project to be commercially robust. “For us, economic viability is the key cornerstone of sustainability, and we’re reliant on external inputs to prove economic viability. It leaves a question mark when it comes to long-term sustainability.”
However, he acknowledges the catalytic role that concessionary capital can play in lowering the barriers for end-users and pushing projects past the “valley of death” in early development. “Obviously, blended finance does have a role to play in lowering the overall cost of the service that that infrastructure provides, making it more cost-effective for the end user. So, that is obviously one benefit that is key. The other, though, is in the early stage development now. And that’s where particularly large-scale projects on the continent often don’t progress, is because of that access to early-stage risk capital. And for us, that’s where blended finance comes in, because that early-stage development risk is probably not the most appropriate risk profile for pension savers to be taken. And that’s where the support of blended finance or other capital, concessionary-type capital, can play a catalysing role.”
When the discussion turned to digital infrastructure, Pema was quick to identify a frequently overlooked prerequisite: the “power gap.” While much of the world talks about data centres and 5G, Pema remains grounded in the physical requirements of the fourth industrial revolution. “In the digital space, funny enough, a key input is power. And on a continent where we’re still underserved when it comes to power and cost-effective electricity, we need to first have stable and cost-effective power in order to catalyse more digital infrastructure,” he points out. The technology itself is not the hurdle; it is the environment in which it must operate. “I think if we can solve for the upstream stability that will make digital infrastructure projects bankable and viable, I think that is really the gap to close. But I think within the technology, when it comes to digital infrastructure, it’s tried and tested. It’s its ability to operate successfully and sustainably in the African context. And a key input into that or a key driver of that is power, affordability, and stability.”
Reflecting on the progress made during the conference sessions, Pema’s takeaway was one of cautious optimism. He noted that while the strategic “intent” of the industry has never been stronger, the challenge now lies in the “how” of execution. “The intent is good and in the right place. It’s now converting that into execution. And as I said before, it’s helping particularly the pension funds understand infrastructure,” he says. He remains acutely aware of the competition for capital, particularly from more liquid global markets. “Particularly for us, the infrastructure asset class, how that compares against the other products available to them, particularly offshore equities, which is an easier sell because they’re so visible and well understood. And it’s growing the base of available infrastructure opportunities for the pool of available infrastructure opportunities for the pension funds to invest in.”
Under Mitesh Pema’s guidance, Mahlako Financial Services is proving that a specialised, black-owned fund manager can be a dominant force in South Africa’s energy transition. By focusing on the foundational necessity of power, the rigour of risk allocation, and the inescapable link between infrastructure and social impact, Pema is helping to build a more resilient and self-sufficient economic future. As the Mauritius summit concluded, it was clear that the goal for Mahlako is no longer just about raising funds—it is about the “energy of individuals” converting good intent into the very physical power that will drive Africa forward.
