Two financial groups invest $26m to supply off-grid to Southern African firms
…’This solution will prevent S/African economy from dropping out of the market in the face of Nigerian competition,’
The African Infrastructure Investment Managers (AIIM), a private equity fund manager owned by Old Mutual and Nedbank Energy Finance, a subsidiary of Nedbank, a South African-based financial institution has provided an investment of $26 million to off-grid supplier Sola Group to provide solar off-grid to companies.
Reports said Southern African countries are in favour of developing the off-grid solar market. The first country targeted by Sola Group to provide solar off-grid to companies is South Africa. “This partnership brings together three highly experienced entities whose combined expertise provides consumers with clean energy solutions at a time when our country (South Africa) desperately needs them,” Afrik21 quoted Chris Haw, CEO of Sola Group yesterday
Reports said the two financial institutions are very active in the renewable energy sector in Africa. Nedbank is one of the financial institutions that is a strong participant in the South African Renewable Energy Supply Programme (REIPPP). This is a programme whose objective is to encourage independent producers of renewable energy (IPP) to invest in South Africa.
AIIM is best known for its investments in the solar off-grid. More recently, it raised $300 million to provide financing to companies that provide this off-grid solution in West Africa. The support of these two partners will make a significant contribution to the Sola Group project. It wants to provide off-grid solar power to companies, with a combined capacity of 40 MW.
This will allow companies to benefit from electricity without the need for investment. They will simply pay a monthly invoice. Solar Group has already signed contracts to supply solar off-grid systems to companies, including breweries, with a combined capacity of 15 MW.
This solution is essential for South African companies that suffer losses due to the failing national electricity grid. This problem is partly caused by a deficit in electricity production and the crisis affecting the public company Eskom.
Things are far from improving since the results for 2019 are not very favourable for Eskom. It lost more than $1.3 billion. The South African Department of Finance came to the rescue by announcing an investment plan of almost 4 billion dollars for investment in Eskom over 2 years.
Analysts say while waiting for a possible evolution of the situation with the results of the second round of REIPPP, the off-grid is a preferred solution by the government for companies. This solution will prevent the South African economy from dropping out of the market in the face of Nigerian competition, Chris Haw said.