A new renewable energy joint venture (JV) is in the offing in Mozambique after local coal power generator Ncondezi Energy Limited signed a term sheet with binding exclusivity with South Africa's NESA. The partners aim to form a JV to create a Southern African commercial and industrial (C&I) renewable energy and storage sector 'champion'.
While Ncondezi Energy has entered the agreement through its wholly owned renewable energy subsidiary Ncondezi Green Power (NGP), NESA comes to the partnership through Nesa Capital and Nesa Engineering (Pty) Ltd.
The proposed JV will have assets from both NGP and NESA including NGP's under construction 400 kW solar PV and 0.9 MWh battery energy storage capacity, its Mozambique project pipeline, and NESA's EPC business, pipeline in South Africa and C&I renewable energy management team.
According to a statement by Ncondezi Energy, once the proposed capital raise and transaction is complete, the JV will have a combined operational portfolio of 15.9 MW solar PV and 1.1 MWh battery storage across 67 sites in South Africa and Mozambique.
The current combined project pipeline of JVCo if successfully implemented would lead to 94.5 MW solar PV and 13.5 MWh battery storage across a further 47 potential sites, it added. The JVCo capital structure is expected to be finalized in Q3/2021.
"The proposed JV with NESA would create a Southern African champion with a cash generative project portfolio, enabling us to rapidly increase our presence in the sector with a clear pathway towards 100 MWp solar PV and 13.5 MWp battery storage over the next 3 years," said Ncondezi's CEO Hanno Pengilly. "The company has initiated an internal review to identify the optimal strategy to ensure both the baseload power and renewable energy C&I businesses are able to achieve their full value for shareholders."
NESA's Engineering Executive Director Peter Frolich added that for the company the JV brings potential access to institutional capital to meet funding requirements to scale fast.