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Jun 06, 2012

Shanduka moves to build regional energy portfolio

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Black economic-empowerment investment holding company Shanduka is pursuing several power generation partnerships in South and Southern Africa in a bid to build its “nascent” energy unit, which is already involved in renewable and conventional power projects in the region.

The group, which has Cyril Ramaphosa as its chairperson and is led by CE Phuti Mahanyele, has 27 investments across the resources, financial services, food and beverage, industrial and energy sectors. Its current portfolio includes investment in companies such as McDonald’s South Africa, Mondi Shanduka Newsprint, Scaw Metals and Standard Bank and Mahanyele says its enterprise value is currently R13-billion.

Energy and infrastructure MD Nandkishor Moharir tells Engineering News Online that unlike the food and beverages milieu, where Shanduka aims to own and control the assets in which it invests, Shanduka Energy is at a far earlier stage of development.

“So we are looking at taking minority positions in projects and building up a competency in this area over time. But we hope that, over a period of five years, we will be able to exercise significant influence,” Moharir explains, adding that no capacity target has yet been established.

The company is partnering with interim power specialist Aggreko, of the UK, on a 107 MW temporary gas-fired power plant, in Mozambique, which will supply electricity to the utilities of both countries over a two-year period. The facility will be fuelled by gas from Sasol's Temane gasfield and the electricity will be purchased by South African power utility Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM).

It has maintained a partnership with Aggreko for the past six years, with the joint venture’s most high-profile recent project having been that of supplying temporary power for the FIFA 2010 World Cup.

But it is also participating in the development of a 40 MW gas-fired electricity development, in Mozambique, a 75 MW wind energy project in South Africa and is advancing with plans to develop a solar water heater business in partnership with a Tsinghua University-owned company called Tsinghua Solar and the Cape Peninsula University of Technology.

Moharir says the company has taken a 37.5% stake in the Kuvaninga independent power producer project situated near Chokwe, in the Gaza province of southern Mozambique.

The project is being codeveloped with Investec, Enventure and the Kuvaninga municipal authority and the power will be sold to EDM over a ten-year period. The gas is to be supplied by Sasol and the facility will comprise ten General Electric/Jenbacher reciprocating engines. It will be built by Group Five and operated by ADC Projects.

“We are not yet building, but we are close to concluding the power purchase agreement with EDM,” Moharir says.

Shanduka is also partnering with Gestamp Wind (60%), South African Renewable Green Energy (12.5%) and community groups (2.5%) on the 75 MW Nobelsfontein wind farm, which is located near Victoria West, in the Karoo. Shanduka is a 25% participant in the development.

The project was named as a preferred bidder during the first bid window under the South African government’s Renewable Energy Independent Power Producer Programme (REIPPP), which means that it must reach financial closure by mid-June.

A commercial operation date has been set for the first quarter of 2014, which means that construction should begin by the end of July.

The company is mulling further wind and solar bids during the third REIPPP window, but Moharir says it first wants to assess the economic viability of future bids in light of the decline in prices from the first bid window to the second.

The Department of Energy has announced that average prices offered by the solar photovoltaic developers fell from 2.75 c/kWh in window one to 1.65c/kWh, while wind fell from 114c/kWh to 89c/kWh. The concentrated solar power plant prices fell slightly from 268c/kWh to 251c/kWh.
 

Edited by: Creamer Media Reporter

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