Johannesburg – January 30, 2019 – In 2018, the JSE-listed, specialist financial services group Ecsponent Limited announced plans to invest in the development of renewable energy projects in sub-Saharan Africa. One of these equity investments is support for Invest Solar Africa Limited, a Botswana-based renewable energy investor and independent power producer (IPP). This pan-African IPP is planning to list on the Venture Capital Board of the Botswana Stock Exchange through an initial public offering (IPO).
Invest Solar focuses on the development of solar parks in the Southern African region. The first project is the Havara solar plant, with the capacity to add 22 megawatts to Zimbabwe’s power grid, scheduled for commissioning in the second quarter of this year.
The Havara plant is being developed on 40 hectares of land in the Bwoni Village, Seke Rural District which is located South West of the city of Harare. In addition to the initial 22MW, an additional 20MW is planned as a second phase of this project.
Through its Supply Chain Solution, the Ecsponent group has been enabling regional vendors in the countries to supply major equipment, including batteries, solar panels, inverters, mountings and transformers to various renewable energy projects. Over the past two years Ecsponent has received orders of over US$17.4 million through its specialised procurement business.
Ecsponent CEO, Terence Gregory says, “Although some orders for equipment in respect of green energy projects have been received in South Africa, the country remains shackled to energy generation from fossil fuels. The rest of the continent, however, is recognising the ability of renewable energy to bring power to their people. Adding energy to the grid has a direct and positive impact on the prosperity and outlook of local communities such as the Bwoni Village.”
In addition to the economic benefits that will flow from the project, local villagers of the Bwoni community will own 10% of this project through a Community Development Share Ownership Trust.
“By providing procurement support, training and skills development to regional, emerging vendors, they will have the opportunity to supply major components to different projects across the region” Gregory adds.
Invest Solar has already attracted investments from Old Mutual Asset Management Zimbabwe and Norsad Finance of US$12 million and negotiated a 20-year offtake agreement with the Zimbabwe government. It is expected that the Havara plant would supply power to the national grid at substantially better rates than Zimbabwe’s current offtake agreement with South Africa’s Eskom.
The Ecsponent group previously announced that it would subscribe under a private placement and subsequently underwrite and subscribe for all the shares in Invest Solar Africa, which are not taken up during the IPO.
The management of Invest Solar took a strategic decision to delay the IPO to coincide with the commissioning of the first plant near Bwoni. Accordingly, Ecsponent today announced that it will not be issuing a circular to shareholders to approve the support for the IPO at this point in time. It will re-enter negotiations once the IPO has been rescheduled and engage with shareholders to pursue an investment in Invest Solar Africa once the Havara project has been commissioned.
Today, two-thirds of Africans still do not have access to “affordable, reliable, sustainable and modern electricity”, which is one of the UN’s key Sustainable Development Goals. In addition, the continent has a young population, which means that electricity demand is expected to double by 2030 and triple by 2040. Investing in renewable energy is not just a more sustainable choice but will make a significant contribution to improving people’s general quality of life including their access to water, technology and information, education, food security and employment.
“If you consider the dire human need for reliable energy solutions and the relative ease and cost effectiveness of constructing solar power plants, the investment case for renewable energy in Africa is stronger than ever,” Gregory concludes.