PRIVATELY-held energy company Seriti Resources today concluded the acquisition of a 100% stake in Windlab South Africa providing it with access to renewable projects worth 4,000MW in the country.
The acquisition, which sees Seriti pay for Windlab with shares in its subsidiary Seriti Green, includes a 75% stake in Winlab’s East African operations. This portion of the deal requires anti-trust approval from the Tanzanian authorities, Seriti said today.
Post the deal Seriti Green will have South African banks RMB and Standard Bank as shareholders with 15.41% stakes each while VennEnergy will have a 15% share. Control of Seriti Green stays with Seriti Resources which holds the balancing 54.19% stake.
Seriti announced in August that Seriti Green could participate in R75bn of investment of which the majority would be in South Africa, mostly in Mpumalanga where the first 450MW project will be built next year at a cost of around R12.5bn.
The investment is in line with a memorandum of understanding signed in October 2021 between Seriti and Eskom and coal industry rival, Exxaro Resources. In terms of the MoU will sign power purchase agreements with renewable energy providers in 2023.
“The finalisation of the South African leg of this transaction is a significant milestone for Seriti Green, enabling us to facilitate the decarbonisation of South Africa’s energy grid, provide diversification within our business and support the new chapter of a just energy transition,” said Mike Teke, CEO of Seriti Resources.
Asked about the overall financial impact on the group, Seriti CFO Doug Gain said in August that “it will take the best part of eight to ten plus years to build a renewables business with revenue comparable with that we currently have across our coal business derived from the sale of around 50mt of coal.
“The medium to long-term strategy is to have some sort of equivalence in attributable profit generation across both elements of the business to give us a genuine broader energy story. For the medium term we will principally be a weighted coal business.”
Asked whether this diversification would have any impact on Seriti’s strategy of remaining a private operation which was unlisted Teke replied: “We are not going to list. We prefer to keep our business private”.