Overview

Pull quote:

“Investing in renewable energy generation to power 1 million South African households a year”

<H2>PROJECTS OVERVIEW

Hulisani has equity investments in diverse but related renewable energy businesses including wind farms, wind tower production, solar, peaking plants, hybrid captive power plants and property lease cash flow managements.

We carefully select our investments and project pipeline to ensure that we deliver attractive returns that are consistent, predictable and reliable inflation-linked returns over the long term, whilst contributing to the upliftment of the communities where our investments are situated.

Hulisani actively participates in the management of all the assets in which we invest, working alongside the excellent operational teams of each project. We invest where we believe we can add value to enhance the asset and thereby create potential upside and certainty of cash flows for our investors.

Our power generating projects are expected to generate almost 63TWh of power between 2019 and 2024, sufficient to power approximately 1million average South African households per annum.

The social capital created by the assets we hold is significant. Given that most of the projects are situated in areas with limited employment opportunities, we are encouraged to see the positive spinoffs of secure employment and the impact this can have on our economy.

RUSTMO1 SOLAR FARM

Located in Marikana in the North-West province, RustMo1 was the first IPP to be connected to the grid and one of the 18 solar PV power plants constructed in the first round of the REIPPP.

The 7MW plant has a 20-year year PPA to supply electricity to Eskom that commenced in 2013.

Hulisani has a 66% shareholding in RustMo1.

PROJECT HIGHLIGHTS

  • First IPP to be connected to the SA power grid
  • Capacity to annually generate more than 12.5 million kWh of clean solar power – enough to power over 2000 average SA homes per year
  • 14 years remaining of a 20 year PPA to supply electricity to Eskom
  • Hulisani’s hand-on approach has yielded valuable knowledge of plant operations and efficiencies
  • Created much needed local jobs and over R2.7m spent in socio-economic development in the Marikana Region
  • Potential for opportunities to expand the plant or to build similar plants for additional offtake in the area

 

Kouga Wind Farm

KOUGA WIND FARM

 

The Kouga Wind Farm began commercial operations in 2015 and is one of the first Wind Farms to be connected under the REIPPP. Located in the Oyster Bay region of the Eastern Cape, Kouga Wind Farm was part of the first round of REIPPP projects.

The R2 billion wind farm comprises 32 wind turbines which each produce 2.5MW, bringing the total capacity of the plant to 80MW.

Hulisani holds a 6.67% interest in Kouga Wind Farm.

 

PROJECT HIGHLIGHTS

  • BID Window 1 REIPPP Project – one of the first Wind Farms under the REIPPP
  • Comprises 32 wind turbines that each produce 2.5MW – connected to SA power grid
  • Annually adds 300 million KWh of clean electricity to the grid – enough for 50 000 average SA households
  • Has 16 years remaining of a 20 year PPA to supply electricity to Eskom
  • Hulisani is represented on the board and works closely with the management team at Kouga
  • Kouga Wind Farm Community Trust is expected to invest R32m into the Kouga communities in the new financial year

Avon and Dedisa Peaking Power

AVON AND DEDISA PEAKING POWER PLANTS

The Avon (670MW) and Dedisa (335MW) Peaking Power plants are open-cycle gas turbine plants (OCGT) located in KwaZulu Natal and the Eastern Cape respectively. With a combined capacity of 1005 MW, South Africa’s only privately-owned gas plants provide contracted peak power to Eskom.

As such, they are designed to help balance the national grid’s fluctuating power needs by supplying additional electricity into the grid when there is a higher demand than anticipated due to a greater need or plant breakdown.

The plants have 15-year PPAs with Eskom, with the option to renew for another 15 years. With a plant life double that of the PPA period, Avon and Dedisa are well placed to run through the contract period and beyond, with additional options to provide power generation to private industry.

Hulisani has an interest in the Avon and Dedisa Peaking Power Plants, held indirectly through a Plants).convertible loan into Legend Power Solutions (which holds 27% in each of the Avon and Dedisa Peaking Power

PROJECT HIGHLIGHTS

  • Open-cycle gas turbine plants (OCGT) located in KZN and Eastern Cape
  • Combined capacity of 1005 MW & SA’s only privately-owned gas plants
  • Provide contracted peak power to Eskom to balance the national grid’s during peak periods
  • Have 15-year PPAs with Eskom, with the option to renew
  • Plant life double that of the PPA period and have options to provide power generation to the private sector
  • Plants are able to use natural gas as soon as a steady supply is available and can be used to unlock the gas market in SA and cement the role of the plants as low carbon energy production

GRI Wind Steel

GRI WIND STEEL

GRI is the only South African operational manufacturer of wind towers and is based in Atlantis, Western Cape. GRI opened its wind tower manufacturing plant in 2014 in this highly impoverished area, creating over 300 jobs and developing skills in the process.

The plant has the capacity to manufacture over 150 wind towers per year – this is the equivalent of supplying 400MW in new-build wind farms per annum, which translates into enough power produced to power 134,000 homes and creates a contribution of R187 million to the economy.

Hulisani has an effective 25% shareholding in GRI.

GRI provides Hulisani with vertical integration into the wind farm supply chain amid increased calls for local jobs and skills to be created and for enforcement of local content rules. In addition, it provides access to global demand for components for the wind generating industry.

PROJECT HIGHLIGHTS

  • Only South African operational manufacturer of wind towers to the global market – boosts local production and creates related component manufacture opportunities
  • Production capacity of 150 wind towers/year -equivalent of 400MW in new wind farms/year – enough power for 134,000 homes and potential contribution of R187m to the economy
  • Over 300 quality skilled jobs created so far – the skills developed are marketable beyond SA
  • GRI provides Hulisani with vertical integration into the wind farm value chain, and access to growing global market for components
  • AFCTA is likely to create further incentives for export on the continent – expected in 2019

uMhlaba

UMHLABA

uMhlaba focuses on identifying, valuing and purchasing the cash-flows from the long-term leases underlying the renewable energy projects banked through the REIPPP in South Africa.

uMhlaba is an innovative, unique business proposition. It procures long-term cash flows underlying a portfolio of land leases arising from operational renewable energy projects. The costs of these leases are paid out of operational expenses and therefore are paid out even before the servicing of senior debt and the payment of dividends.

The leases or the land are purchased where there is potential upside, thus creating an income diversification strategy and providing a longer-term position in the renewables sector.

PROJECT HIGHLIGHTS

  • Opportunities for long-term cash-flows from leases underlying the renewable energy projects banked through REIPP
  • Land leases identified in the market estimated to have a value of around R450 million and provide an investment rate of return of %16 (FCF basis)
  • Potential stand-alone business as more opportunities open up – estimate an annual market of R250 million for next two years and R150 million for two years thereafter
  • In FY2019 uMhlaba offers accepted by seven landowners – transactions consider an optimal mix of equity and debt imply shareholders are not diluted
  • The next milestones for uMhlaba are the successful raising of up to R450 million and reaching financial close on the first seven projects valued at ~R160 million

Ignite Energy Solutions

IGNITE ENERGY SOLUTIONS

Ignite is a company focused on the development of short to medium term flexible power solutions throughout Africa. What distinguishes the Ignite business from other IPP developers is that the power solutions offered by Ignite are capable of fast implementation and are able to reach even the most remote areas on the continent.

Ignite identified a pipeline of projects located in various areas of the African continent and required a funding partner to assist it in securing this pipeline.

Hulisani holds preference shares in Ignite which, inter alia, secures Hulisani the right to invest in any projects developed by Ignite thereby creating a pipeline of opportunities, whilst simultaneously providing a return on the preference share.

PROJECT HIGHLIGHTS

  • Focused on the development of short to medium term flexible power solutions throughout Africa
  • Capable of fast implementation and able to reach the most remote areas on the continent
  • Largest mine-based, off-grid hybrid project in the world – uses a mix of solar, diesel and battery power provided through secured off-take agreements
  • Hold preference shares in Ignite as a funding partner to secure future pipeline of projects
  • Obtained preferred bidder status on two significant captive hybrid power IPP transactions in West Africa (Ghana & Mali) – positions Hulisani as a leading African IPP
  • Developing and advancing a current pipeline of shortlisted projects and those with exclusive agreements in place with customers