Extending the investment in renewable energy in SA

June 4th, 2019, Published in Articles: Energize

Reatile Renewables has taken up a 20% shareholding in Juwi Renewable Energies’ EPC company, which is currently building three projects for Round 4 of South Africa’s renewable energy independent power producers procurement programme (REIPPPP), totalling 250 MW of grid-connected solar PV. Reatile formally entered into the agreement, with the signing of the papers by Simphiwe Mehlomakulu, the chair of Reatile Group and Greg Austin, the managing director of Juwi, in April 2019. In so doing, Reatile extended its investment in the renewable energy sector in South Africa.

Mehlomakulu says that Reatile invested in Juwi, and in the renewable space, because Juwi is one of the leading companies which installs and operates wind and solar power projects all over the world. “The company is strong in Germany and other parts of Europe. When I visited the company’s head office in Germany last year, I was astounded by the technology and the support to the technology I saw. Juwi is a well-capitalised company which is developing projects all over Africa”, he said.

Simphiwe Mehlomakulu and Greg Austin sign the investment deal.

“The Reatile Group is interested in investing in power throughout the continent. Its vision is to diversify its energy mix away from fossil fuel and replace, or combine it, with renewables. We believe that renewables, as a source of clean energy, is the energy of the future. We want to make sure that for every rand we make in fossil fuel, we make the same rand in renewables – so that ultimately we’ll have a neutral carbon footprint,” says Mehlomakulu.

According to Austin, the context for Reatile investing in the EPC company is one that relates back to the renewable energy IPP programme and the round 4 projects. “There were delays in the programme for a long time. Subsequent to that, during 2018, the Department of Energy went back to the successful investors and owners to renegotiate tariffs and to insert new requirements relating to active black shareholding in the project companies which own those projects and the contractors involved in those project companies to deliver the projects. Juwi subsequently engaged with the lead equity on the three projects, Old Mutual, and has provided the commitment that we will be at least 40% black-owned and at least 50% of that ownership will be through an active black industrialist shareholder. I am really delighted, not only because our agreement with Reatile Renewables fulfils that objective, but also because there is a clear, broader strategic fit for the two companies.”

In 2018, Reatile invested in six PV projects which Old Mutual secured in Round 4 of the REIPPPP, three of which are under construction by Juwi, and for which the company will also perform the operations and maintenance for an initial period of five years.  Looking to the future with Reatile, Austin says his company is also engaging in a transaction involving its O&M subsidiary company, whereby Reatile would take up an equity stake in that company.  “We are really at the stage of taking the first steps on a much longer and deeper relationship  journey that we will be exploring, in terms of Reatile’s participation in our projects in South Africa and on the continent, as it relates to our hybrid power projects focusing on mines,” says Austin.

Mehlomakulu says his company is interested in Juwi’s projects in South Africa and in other parts of Africa because the company is interested in owning power generation – the actual power that it sells. The combination of investing in Juwi, being the originator of the project as well as looking for an investor in some of its projects throughout Africa, makes a very symbiotic relationship with Reatile Group.

“We are excited about concluding this first engagement with Reatile. We have seen them to be the best partner to complement our strategy, and we have witnessed their positive active engagement already;  the deal ticks the important boxes, particularly from a Department of Energy perspective, as they are an active black shareholder in juwi being a leading global renewables company; and we believe we can do a lot of good work together in South Africa and on in sub-Saharan Africa”, says Austin.

Contact Greg Austin, Juwi Renewable Energies, Tel 021 831-6100, greg.austin@juwi.co.za

 

 

Caption: Reatile Group formally enters into a shareholding agreement, with juwi Renewable Energies, with the signing of the papers by Simphiwe Mehlomakulu, Chairman of Reatile Group & Greg Austin, Managing Director of juwi.

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