BUSINESS LIVE / 19 JULY 2018 - 05:07 / LISA STEYN
Independent power producer Globeleq will acquire the majority shareholding in six of SA’s renewable energy projects as part of its continued expansion of its renewable energy portfolio throughout the continent.
The acquisition, the price of which Globeleq would not disclose, will result in the power producer acquiring six assets in SA — five solar projects and one wind farm — from Brookfield Asset Managers, an alternative asset manager based in Canada and listed on the New York Stock Exchange.
The acquisition will add 178MW to Globeleq’s existing 238MW of solar and wind projects in SA to control a total of 416MW, enough to power the whole of Vereeniging in the Vaal Triangle of Gauteng.
For comparison, SA’s energy blueprint, the Integrated Resource Plan, has a target of 17,800MW of energy to be produced from renewable energy sources by 2030. Eskom reports national peak demand at just below 33,700MW.
The six projects were part of rounds one and two of the government’s renewable energy programme and started operating commercially in 2014.
The six projects in which Globeleq now has a stake all have a 20-year power purchase agreement with Eskom.
Department of Energy
Globeleq said the shareholding deal was subject to various approvals. All such acquisitions would have to be signed off by the Department of Energy, according to Terence Govender, chairman of the South African Renewable Energy Council.
"There are limitations on what a company can and cannot do," said Govender.
He cited the level of black economic empowerment as an example of a limitation, noting that this would have to remain the same or even increase.
The deal, however, also represents consolidation in a sector already criticised for being controlled by a handful of players.
When bidding for various power-producing projects, the consolidation of international companies has been blamed for pricing smaller South African bidders out of the programme.
However, acquisitions such as Globeleq’s were not unusual, Govender said.
Michael Ozersky, head of project finance at Globeleq, said the acquisition was a positive development for the energy sector as a whole.
Globeleq CEO Paul Hanrahan said in a statement the expertise of the company’s South African team would enhance these assets by driving operational improvements and improving the existing social and economic development programmes.
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