Gridworks, the UK’s developer and investor in African electrical networks, and Fresh GX, a South African investment business, have announced a new investment of US$40 million in Sustainable Power Solutions Investments, a Gridworks portfolio company (“SPS”).
“We are thankful to Gridworks and CDC Group for their continued strong support of our business. Their initial investment was made just as the world went into lockdown due to the COVID pandemic and their support allowed us to grow our business rapidly during a very challenging period,” Francois Van Themaat, CEO of SPS said.
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“During the last quarter we have consolidated our funding and engineering businesses under the single ‘Sustainable Power Solutions’ brand which, combined with the new capital injected by shareholders, will allow us to expand our fully integrated solar PV and battery storage offering across Sub Saharan Africa.”
SPS will be able to provide cleaner, less expensive solar energy to more businesses in Sub-Saharan Africa as a result of the funding.
Gridworks and New GX’s proportionate shareholdings in SPS are reflected in the US$40 million in new capital, with Gridworks pledging $US22 million and New GX committing $US18 million. Gridworks is also investing $9 million to become a majority shareholder. Gridworks has now committed a total of US$31 million to SPS in this deal. With the implementation of New GX, the company’s local empowerment ownership will increase to over 42%.
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Gridworks (founded by CDC, the UK’s DFI) will become the company’s primary stakeholder, while New GX, which is owned by the Pitje family trust and represented by Khudusela Pitje, will take the place of the company’s current minority owners, Trigen Group and Genfin. Titan Group, founded by Christo Wiese, will remain a shareholder in the company. Gridworks and New GX’s long-term finance will allow the company to expand across Sub-Saharan Africa and extend its footprint in existing markets. The company intends to construct another 100MW of projects. Khudusela Pitje and Carin van Woudenberg will join the SPS board as part of New GX’s investment.
Why The Investors Invested
In late 2019, Gridworks made its first investment in SPS (then known as Mettle Solar Investments). Since then, the company has developed approximately 22MW of grid-connected projects in Southern Africa and Kenya, as well as 4.2MW / 8.7MWh of islanded projects in the Seychelles, including some of the largest off-grid systems in Africa for its customers using Tesla’s Powerpack technology. Mbuvi Ngunze, a seasoned Kenyan businessman and former CEO of Kenya Airways, has been named Chairman of SPS by Gridworks. SPS’s operating facilities cut carbon emissions by more than 11.7 million kilogrammes in the previous financial year.
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“We’re delighted to become the majority shareholder in SPS and support the company in the next stage of its development. Since first investing in 2019, we’ve helped the company become one of only a small set of African developers operating sustainably to finance, build, and operate grid-tied and battery-backed, off-grid systems. We’re excited that New GX Capital have decided to invest in the business alongside us. They have a wealth of experience in long-term infrastructure investing and will be a strong partner who share our ambitions for SPS. Their investment and expertise will be invaluable as SPS expands into new markets across Africa,” Gridworks CEO Simon Hodson said.
Khudusela Pitje, CEO of New GX Capital added:
“We are delighted to partner with SPS and Gridworks to unlock our renewable energy vision in the commercial & industrial sector across the continent. We will bring our in-depth knowledge as an infrastructure investor and increase SPS’s footprint in the telecoms and industrial sectors. We are driven by a sustainable tomorrow which we believe will also drive industrialisation within the continent.
“In South Africa, regulatory certainty is key to attracting capital. We believe President Ramaphosa’s announcement for lifting the license requirements around100MW embedded energy opportunities will drive job creation (especially amongst the youth); private sector investment in the Telecoms sector; and indirectly assist utilities to generate additional capacity without government backed guarantees”
A Look At What SPS Does
Founded in 2010 by Axel Scholle, SPS partners with commercial and industrial (C&I) clients in Sub-Saharan Africa to fund, develop, build, and operate solar power systems, including battery storage, that deliver reliable, cheap sustainable energy. SPS has about 45MW of solar and more than 15MWh of battery storage (in operation and under development) throughout the hospitality, telecoms, retail, and other industries in South Africa, Namibia, Kenya, and the Indian Ocean islands.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer