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Ncondezi, GridX start JV for solar, battery projects in Africa

5th April 2019

By: Marleny Arnoldi

Deputy Editor Online

     

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Aim-listed Ncondezi Energy has entered into a term sheet with power developer GridX Africa Development, enabling the companies to enter into a joint venture (JV) that is focused on building and operating captive solar and battery storage solutions for the African commercial and industrial sector. 

To this end, Ncondezi raised £1.88-million, or $2.48-million, though a placing of around 280-million shares at 6.50p apiece, which will be used to pay a fee in two stages to GridX of $390 000.

This fee will allow Ncondezi to enter into definitive agreements to formalise the JV, including the costs to set up the JV, the costs to secure an exclusivity period and a right of first refusal over GridX’s pipeline of commercial and industrial projects.

It was also intended that the funds will be used to fund the first project, currently estimated to be valued at $1.1-million. The companies are targeting the completion of definitive agreements by the end of the second quarter.

RATIONALE

Ncondezi has identified significant market demand for cost effective and reliable power in the African commercial and industrial sectors, and solar and battery storage increasingly makes economic sense against traditional power generation such as diesel generators.

The JV with GridX will provide access to a portfolio of around 15 solar and battery projects in Africa, six of which are at an advanced stage.

Pursuit of the projects is complementary to Ncondezi’s 300 MW coal power project, providing the company with access to the renewable energy space.

“Falling solar panel and battery costs are setting the foundation for a tide of disruptive technology in the African energy markets, allowing African countries to leapfrog to the next generation of sustainable energy supply.

“At the same time, significant investment appetite is growing in the sector as investors increasingly recognise smaller renewable captive generation projects as a source of steady returns,” Ncondezi nonexecutive chairperson Michael Haworth says.

He adds that GridX recently completed its first solar and battery storage project at Singita Faru Faru Lodge, in Tanzania. The GridX project is the first of its kind in Tanzania and the first commissioned using Tesla batteries.

This provides a strong experience platform to deliver the rest of the GridX portfolio through the JV.

“The JV structure provides the opportunity for a phased and low-risk entry point into the sector, with GridX responsible for the development and delivery of construction ready projects for investment consideration and a diversified portfolio approach spreading investment risk across multiple projects.”

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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