A new alliance is emerging in the solar energy sector in Africa. It is a joint venture that the British company Ncondezi Energy will form with GridX Africa Development, a private power producer (PPP). The objective of the alliance is to conquer the African solar and energy storage market.
More specifically, both companies want to provide mini-grids with batteries to businesses and companies located on the African continent. The solar sector is increasingly attracting PPPs to Africa, where the demand from companies for clean and cheaper energy continues to grow. For example, the CrossBoundary Energy investment fund and Equator Energy, which design, finance and operate solar power plants, allowing companies to benefit from electricity without necessarily investing in solar power plants themselves.
In addition, “investors’ appetite is opening up to the solar mini-grid sector because they have now fully understood that small renewable energy projects are a regular source of income,” explains Michael Haworth, President of Ncondezi.
Fundraising through the joint venture
In order to enter into a definitive joint venture agreement with GridX, Ncondezi raised £1.88 million, or $2.48 million. These funds will pay a $780,000 fee to GridX, a necessary condition for the signing of a final agreement with GridX. In return, the joint venture will have access to the 15 solar mini-grid projects in GridX’s portfolio in Africa.
The remaining capital raised by Ncondezi will finance the establishment of the joint venture and a first solar mini-grid project for $1.1 million. The Joint Venture Company is expected to exit the baptismal funds before the end of the second quarter of 2019.
The question remains as to whether GridX will also transfer its latest project to the future joint venture: a mini-grid developed in partnership with IPP Solar Africa. It provides 189 kWp of solar energy to Singita Faru Faru Lodge, a hotel located on the western corridor of Serengeti National Park in northern Tanzania. This small ground-based solar power plant is integrated into a 174 kW/522 kWh battery system from the American brand Tesla. This mini-grid replaces generators that used to consume an average of 100,000 litres of diesel each year.
Jean Marie Takouleu