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 with a nominal capacity of up to 100 MWe 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 primarily be gas-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.
Further
Opportunities
The initial programme of investments to be carried out by the Group
is focused on CHP projects selling heat/steam and electricity to industrial
groups in Southern Africa. These will typically be projects with an
installed capacity of electricity up to 100 MWe, although the Directors
will not discount the possibility of pursuing power projects on a larger
scale.
The Directors believe
that in the medium term the following opportunities exist:
- Sale of power
to Eskom – the Group is in discussions with Eskom with a view
to entering into power purchase agreements for the sale of electricity
capacity and energy to Eskom for distribution nationally in South
Africa from newly developed power plants.
- Other South African
industrial groups – the Group is in discussions with a number
of other industrial groups with a view to the development of power
“islands” serving large industrial consumers of electricity.
- Acquisition of
existing power plants – the Group may bid for existing power
plants offered for sale by local municipalities or Eskom as part of
a privatisation process.
- LNG-fired developments
– certain members of the Group’s management team have
experience in LNG-based power generation. The Directors anticipate
that some of the new large-scale power capacity to be installed in
South Africa in the future will be fuelled by LNG sourced from overseas
gas producers.
|
