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> September 19, 2005 |
New AIM arrival targets spiralling power demand in Southern Africa We’ve all heard of taking coals to Newcastle. New AIM arrival IPSA Group plc is going one step further by taking a whole power plant. IPSA, which arrives on AIM tomorrow, will dismantle a power plant in Bury, Lancashire, and ship it 6,000 miles to Newcastle, KwaZulu Natal in South Africa – a dramatic demonstration of the spiralling demand for more electricity in the region. The 18 MW combined heat and power unit will be reconstructed as the first of three electricity generation projects the company has so far planned in Southern Africa. IPSA arrives on AIM following an £8 million institutional fund raising at 27p per share, valuing it at £14.75 million. The shares start trading on Tuesday September 20. The company has been established to develop, own and operate power plants in South Africa and neighbouring countries against a backdrop of accelerating demand and predicted shortfalls. In South Africa itself, demand for electricity is expected to outstrip supply by the end of 2006. IPSA Chief Executive Peter Earl said: “We have no doubt that with the forecast shortfall in generating capacity in the near future, there will be abundant opportunity to develop new power plants in the region.” In South Africa, where state-owned Eskom currently generates 95% of the electricity supply, it is now government policy that 30% of new capacity over the next five years should come from independent producers such as IPSA - equivalent to more than 1,600 MW. Countries such as Botswana, Lesotho and Swaziland are traditionally reliant on South Africa supplying a significant proportion of their electricity demand, and are likely to be hit by its shortfalls. The £8 million placing was handled by IPSA’s broker and NOMAD, Noble & Co Ltd. For further information contact:
IPSA has two
principal business objectives: Approximately 32% of South Africans do not have access to electricity at home, while peak demand for electricity in South Africa is forecast to exceed existing power capacity by the end of 2006. The government is committed to increasing electricity output and has announced the country needs to boost capacity by 5,000 MW. It is now government policy that 30% of all new power capacity constructed over the next five years should be met by independent suppliers. IPSA has initially targeted specific projects in South Africa and Swaziland, and has three active projects under varying stages of development. They are all based on building “inside the fence” combined heat and power plants with a nominal capacity of up to 100 MWe, primarily gas-fired and producing both heat/steam and electricity for dedicated industrial users. The first plant will supply a synthetic rubber manufacturer, Karbochem, at Newcastle in KwaZulu Natal, South Africa. Key agreements are in place for steam sales and gas supply. The Directors believe that in the medium term there will be opportunities for the sale of power to Eskom from newly developed power plants, the development of power “islands” serving large industrial consumers of electricity, the acquisition of existing power plants, and the use of LNG in power generation. The National Electricity Regulator, which regulates electricity prices in South Africa, has indicated it will pass on to the consumer the increased costs of cleaner electricity. In October 2004 Eskom’s electricity tariff was increased by 4.1% for 2005 compared with a 2004 increase of 2.5%. South Africa’s GDP grew by 3.5% in 2004 and is forecast to grow by an estimated 4.0% in 2005 and 2006. The Company has raised £8.0 million before expenses through a placing of 29,629,630 new shares at 27p per share. It values IPSA at £14.75 million. |
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