US$20m solar investment to back Distributed Power Africa
Distributed Power Africa (DPA) has announced a planned US$20-million solar investment from Royal Bafokeng Holdings (RBH) in a newly formed company (Asset-Co) specifically set up to own and install 175MW of solar energy across selected DPA markets in the next four years.
RBH is a long-term African community investment holding company and intends to take a 60% equity stake in DPA Africa Asset-Co alongside Econet Energy Limited.
According to a statement released by the companies, the investment will provide funding to boost DPA commercial and industrial solar projects in South Africa, Kenya, Democratic Republic of the Congo, and Zambia.
“Through this facility, DPA expects to unlock more distributed-energy solutions based on power lease agreements for photovoltaic (PV) panels and energy storage systems to customers in this sector. For RBH, this project is another step in their journey towards portfolio diversification and provides a long-term investment opportunity in making affordable, efficient energy widely accessible to businesses so that they can, in turn, empower communities. The partnership comes at an opportune time when the South African Government is encouraging investment in renewable energy and will accelerate the much-needed 6.8GW energy capacity, as outlined in the Integrated Resource Plan of 2019,” reads an excerpt from the statement.
According to Norman Moyo, CEO of DPA Africa, the company has sought ways to ease the burden of deploying solar by ensuring its customers engage in a Capex-free model where they sign power lease agreements of up to 15 years.
Moyo said: “We are excited to be backed by a like-minded African community investor RBH, in unlocking energy by reducing the burden of upfront investment for businesses. We believe energy is a fundamental pillar in supporting Africa’s economic development. This opportunity is an important step towards our vision of powering Africa for a better and brighter future, he added”.
DPA said its offer of an Asset-Co structure “allows long-term investors, pension funds, and climate investors to secure investment that delivers sustainable, predictable income and capital growth through the power lease and power purchase models.”
The companies believe distributed energy models also provide one of the fastest and most effective ways to bridge the energy generation gap in sub-Saharan Africa due to the advances in solar and storage technology, and ease of deployment.
Albertina Kekana, RBH CEO highlighted that a key focus for RBH is investment in infrastructure with a focus that includes wind and solar in the energy space.
Kekana commented: “We are particularly pleased about this opportunity as it enhances energy as a key enabler for the datacentre business - now a major investment focus in our portfolio - as the demand for connectivity has been greatly increased by the pandemic. We have partnered with a very dynamic business with a strong record of execution on the African continent who are backed by a very successful Group, Econet.”