Gridworks, the UK’s developer and investor in African electricity networks, and New GX, the South African investment firm, have today announced US$40 million of new investment in the Gridworks portfolio company, Sustainable Power Solutions Investments (“SPS”).
SPS works with commercial and industrial (C&I) clients across sub-Saharan Africa to fund, develop, build and operate solar power technologies, including battery storage, that provide consistent, affordable clean energy. SPS has over 45MW of solar and more than 15MWh of battery storage (in operation and under construction) in South Africa, Namibia, Kenya, and Indian Ocean islands, spread across hospitality, telecoms, retail, and other sectors.
The investment announced today also sees Gridworks (established by CDC, the UK’s DFI) become a majority shareholder in the company, while New GX, which is owned by the Pitje family trust, and represented by Khudusela Pitje, will replace current minority shareholders, Trigen Group and Genfin. Christo Wiese’s Titan Group will remain an investor in the business. The long-term funding provided by Gridworks and New GX will enable the company to deepen its presence in existing markets and expand across Sub-Saharan Africa. The company is targeting building an additional 100MW of projects. As part of New GX’s investment Khudusela Pitje and Carin van Woudenberg will join the SPS board.
Read also: MaxAB raises $15m, acquires WaystoCap
Lack of reliable grid power has led to more than half of businesses in sub-Saharan Africa using diesel generation to ensure certainty of supply. With more than three-quarters of total energy demand in Africa coming from commercial and industrial customers, the need is clear. Solar PV and battery storage solutions are increasingly providing a viable and cheaper alternative for many businesses that see the value in being able to benefit from greener, more consistent power. SPS is a leader in the sector and well-positioned to accelerate the use of solar energy with Gridworks’ and New GX’s support and capital.
The US$40m of new capital for SPS reflects Gridworks and New GX’s relative shareholdings in the company, with Gridworks committing $US22m and New GX US$18m. In addition, Gridworks is investing $9m to become a majority shareholder. This brings Gridworks total commitment to SPS in this transaction to US$31m. The introduction of New GX will also bring the local empowerment ownership in the company above 42%.
Gridworks first invested in SPS (then known as Mettle Solar Investments) in late 2019. Since then, the company has built over 22MW of grid-tied projects in Southern Africa and Kenya and 4.2MW / 8.7MWh of islanded projects in Seychelles, including some of the largest off-grid systems using Tesla’s Powerpack technology in Africa for its customers. Gridworks also appointed the experienced Kenyan businessman and former CEO of Kenya Airways, Mbuvi Ngunze as Chairman of SPS. In the last financial year, SPS’s operating plants reduced carbon emissions by more than 11.7 million kilograms.
How to raise $1,000,000 million+ through Venture Financing
Announcing the new investment, Gridworks CEO Simon Hodson said:
“We’re delighted to become the majority shareholder in SPS and support the company in the next stage of its development. Since first investing in 2019, we’ve helped the company become one of only a small set of African developers operating sustainably to finance, build, and operate grid-tied and battery-backed, off-grid systems. We’re excited that New GX Capital has decided to invest in the business alongside us. They have a wealth of experience in long-term infrastructure investments and will be a strong partner who shares our ambitions for SPS. Their investment and expertise will be invaluable as SPS expands into new markets across Africa.”
“Gridworks exist to increase the quantity and quality of power in Africa and our mandate covers transmission and distribution infrastructure, as well as off-grid solutions like SPS. SPS, and the C&I sector as a whole, can provide green, reliable power to businesses that will go on to create jobs and economic opportunity.”
Khudusela Pitje, CEO of New GX Capital added:
“We are delighted to partner with SPS and Gridworks to unlock our renewable energy vision in the commercial & industrial sector across the continent. We will bring our in-depth knowledge as an infrastructure investor and increase SPS’s footprint in the telecoms and industrial sectors. We are driven by a sustainable tomorrow which we believe will also drive industrialization within the continent.
“In South Africa, regulatory certainty is key to attracting capital. We believe President Ramaphosa’s announcement for lifting the license requirements around100MW embedded energy opportunities will drive job creation (especially amongst the youth); private sector investment in the Telecoms sector; and indirectly assist utilities to generate additional capacity without government-backed guarantees”
Francois Van Themaat, CEO of SPS said:
“We are thankful to Gridworks and CDC Group for their continued strong support of our business. Their initial investment was made just as the world went into lockdown due to the COVID pandemic and their support allowed us to grow our business rapidly during a very challenging period.
“During the last quarter we have consolidated our funding and engineering businesses under the single ‘Sustainable Power Solutions’ brand which, combined with the new capital injected by shareholders, will allow us to expand our fully integrated solar PV and battery storage offering across Sub Saharan Africa.
“We look forward to working closely with Khudusela Pitje and the New GX team to move the business to the next level. They have bought into our overall vision for the company, and we are eager to learn from their experiences in building infrastructure businesses.”
What You Need To Know About SPS
Founded in 2010 by Axel Scholle, SPS partners with commercial and industrial (C&I) clients in Sub-Saharan Africa to fund, develop, build, and operate solar power systems, including battery storage, that deliver reliable, cheap sustainable energy. SPS has about 45MW of solar and more than 15MWh of battery storage (in operation and under development) throughout the hospitality, telecoms, retail, and other industries in South Africa, Namibia, Kenya, and the Indian Ocean islands.
Read the original article here
