LONDON: Ncondezi Energy Limited has announced that it has entered into a term sheet with GridX Africa Development, an African power developer, enabling it to enter into a Joint Venture (JV) focused on building and operating captive solar and battery storage solutions for the African Commercial and Industrial sector.
Ncondezi Energy also raised a total of £1.88 million before expenses, through a conditional placing and direct subscriptions of 28.856 million ordinary shares in the Company at a price of 6.50 pence per Ordinary Share.
The Company will use the proceeds of the fundraising to pay a fee in two stages to GridX of US$ 390,000 allowing the Company to enter into definitive agreements to formalize the JV.
It is also intended that the funds will be used to fund the first project, currently estimated to be US$1.1 million, with the balance of the fundraising available for general working capital purposes.
Ncondezi Non-Executive Chairman, Michael Haworth, commented: “The Company is pleased to announce the signing of a binding term sheet with GridX, and believes the move into the C&I solar and battery storage sector represents a significant opportunity for the Company to complement its existing large scale baseload power project and access near-term low-risk annuity income streams which the Company believes has significant growth potential.
Falling solar panel and battery costs are setting the foundation for a tide of disruptive technology in the African energy markets, allowing African countries to leapfrog to the next generation of sustainable energy supply. In a similar way to wireless cellular phones allowing African countries to bypass fixed line infrastructure and adopt mobile technology. At the same time, significant investment appetite is growing in the sector as investors increasingly recognise smaller renewable captive generation projects as a source of steady returns.
GridX recently completed its first solar and battery storage project at Singita Faru Faru Lodge, located in Tanzania. The GridX project is the first of its kind in Tanzania and the first commissioned using Tesla batteries. This provides a strong experience platform to deliver the rest of the GridX portfolio through the JV.
The JV structure provides the opportunity for a phased and low risk entry point into the sector, with GridX responsible for the development and delivery of construction ready projects for investment consideration and a diversified portfolio approach spreading investment risk across multiple projects.
The successful Fundraising provides the Company with sufficient capital to enter into the exclusive discussions with GridX on the JV and a ROFR to invest in its projects in the meantime with the first project fully funded (subject to approval and documentation), as well as general working capital until the end of Q1 2020 (subject to the Shareholder Loan). This puts the Company in a strong financial position to execute on its work program.
In parallel to the JV with GridX, the Company and its potential strategic partners continue to be focused on delivering the Joint Development Agreement in respect of the Ncondezi Project during April 2019″.[the_ad id=”31605″]