South African distributed renewable energy company, Sustainable Power Solutions (SPS), has secured a new investment of US$40 million from Gridworks and New GX to expand its supply of clean energy solutions and deepen its presence in existing markets across Sub-Saharan Africa.
Gridworks Development Partners is an investment company that focuses on financing transmission, distribution, and off-grid electricity in Africa. The company is contributing $22 million to SPS’ capital and an additional $9 million which will make it a majority shareholder of SPS, having committed a total of $31 million of the whole investment.
The remaining funds- $18 million- are being provided by New GX, a wholly black-owned and managed investment holding company in South Africa. New GX’s investment will replace current minority shareholders and as part of the agreement, its CEO Khudusela Pitje and Carin van Woudenberg will be joining the SPS board.
What SPS does
SPS works with commercial and industrial (C&I) clients across sub-Saharan Africa to fund, develop, build and operate solar power technologies, including battery storage, that provide consistent, affordable clean energy.
The company boasts of over 45MW of solar and more than 15MWh of battery storage (in operation and under construction) in South Africa, Namibia, Kenya, and Indian Ocean islands, spread across hospitality, telecoms, retail, and other sectors.
Since lack of reliable grid power has led more than half of businesses in sub-Saharan Africa to spend more money burning fossil fuels to ensure certainty of supply, using renewable energy, including solar, has a double benefit for businesses in this region.
Leveraging renewable energy will also allow businesses to reduce their carbon footprint while saving costs.
With more than three-quarters of total energy demand in Africa coming from commercial and industrial customers, the need is clear. Solar PV and battery storage solutions are increasingly providing a viable and cheaper alternative for many businesses that see the value in being able to benefit from greener, more consistent power.
A second dose of cash injection
Back in 2019, Gridworks first invested in SPS which was formerly called Mettle Solar Investments. The company has since merged with Sustainable Power Solutions to form the single entity SPS, whose majority shareholder is Gridworks, with a commitment of $31 million.
With these new equity investments from Gridworks and New GX, SPS is well-positioned to accelerate the use of solar energy, enter new markets in sub-Saharan Africa, Ghana and Nigeria. It also plans to deploy the funds in developing 100 MWp of new installed capacity for commercial and industrial customers in sub-Saharan Africa.
Commenting on the investment, Gridworks CEO Simon Hodson said, “We’re delighted to become the majority shareholder in SPS and support the company in the next stage of its development.
“We’re excited that New GX Capital has decided to invest in the business alongside us. They have a wealth of experience in long-term infrastructure investments and will be a strong partner who shares our ambitions for SPS. Their investment and expertise will be invaluable as SPS expands into new markets across Africa.”
According to Hodson, Gridworks exists to increase the quantity and quality of power in Africa; as such, it is committed covers transmission and distribution infrastructure, as well as off-grid solutions like SPS.
“SPS, and the C&I sector as a whole, can provide green, reliable power to businesses that will go on to create jobs and economic opportunity,” he added.
Khudusela Pitje, CEO of New GX Capital also added that regulatory certainty is critical to attracting capital. He said, “We believe President Ramaphosa’s announcement for lifting the license requirements around 100MW 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”
