Investment Strategy

The Group’s strategy is to create a portfolio of power generation assets in Southern Africa, in conjunction, where the Directors believe this to be advantageous, with project partners. In the event that appropriate opportunities present themselves outside this area, the geographic boundaries for investment by the Group may be extended.

The Directors’ initial target projects are based on building “inside the fence” CHP plants for industrial companies seeking to obtain pricing predictability for their energy costs and secure a dedicated supply of electricity. It is intended that these plants, subject to fuel supply and commercial considerations, will be gas or coal fired and produce both heat/steam and electricity. When located close to a major power demand centre, such plants may also be able to contribute to the local transmission system and provide ancillary services (such as emergency power and voltage and frequency stabilisation) to the grid operator.

The strategy of the Group is to build up its portfolio of power generation assets through a combination of acquisitions and joint ventures, as the Directors consider appropriate to each project. Each project will be owned and managed by a dedicated project company (“Project Co.”) established to ring-fence the funding and contractual arrangements for the project. The Group intends to retain a controlling equity interest in each Project Co. where possible. If a Project Co. is not exclusively owned or controlled by the Group, a shareholder agreement will be put in place to govern, inter alia, the Project Co.’s board composition and management, funding and dividend policy.

In due course, the Directors intend to extend the business to participate in larger scale electricity generation projects as opportunities arise.