(Bloomberg) — African Rainbow Energy and Power, an energy company founded by billionaire Patrice Motsepe, expects to announce deals on solar projects this year as part of its growth plans on the continent.
“We want to focus on cleaner energy technologies. So, for us it’s renewables, it’s hydro included, and gas-fired generation,” AREP Chief Executive Officer Brian Dames said Thursday in an interview at the World Economic Forum in Davos, Switzerland. “That combination in our portfolio would really stand us well in terms of the future.”
South Africa generates more than 75 percent of its power from coal through state-owned Eskom Holdings SOC Ltd., which Dames led until 2014. AREP, an investment vehicle with a focus on energy, expects to announce deals for six solar projects once the transactions have been concluded, he said. A financial investment decision is planned for June.
“Renewables provide an ideal opportunity for companies like ourselves, given the resources Africa has got and the significant reduction in renewable prices to really expand that, not only in South Africa but across the continent and that will be our focus,” he said.
“As we make investments, these are investments that you should see cash flows in three years or less,” Danes said.
South Africa’s program to purchase renewable energy from independent producers has drawn 194 billion rand ($14 billion) toward new infrastructure. As of June last year, 2,200 megawatts of power from 44 projects had been connected to the national grid. The country also plans to initially buy power from 3,000 megawatts of gas-fired generation.
“Globally, we’ve seen a reduction in coal,” according to Dames, adding that the fuel will remain an important part of South Africa’s energy mix.
To contact the reporters on this story: Katia Porzecanski in Davos at kporzecansk1@bloomberg.net; Paul Burkhardt in Johannesburg at pburkhardt@bloomberg.net; To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net Lynn Thomasson, Liezel Hill