Merger of AIIM and Helios backed solar energy companies
Renewable energy services provider, Starsight Energy, and South African-based solar firm, SolarAfrica Energy, announced their merger agreement, combining their strengths to become one of the continent’s leading solar players with a genuine pan-African footprint to provide competitive, full-service renewable energy and energy efficiency solutions to the commercial and industrial (C&I) sector.
The merger, which is subject to standard regulatory approvals including anti-trust approvals, comes at an opportune time following favourable changes in South African renewable energy regulations. The merged entity will comprise a portfolio of over 220MW of operated and contracted generation capacity, and 40MWh of operational battery storage, with an additional generation pipeline exceeding 1GW.
Alongside the merger, funds managed by African Infrastructure Investment Managers (AIIM) have committed substantial further funding to the South African subsidiary of the merged entity, to progress the build-out of the contracted pipeline in the C&I wheeling market in South Africa, providing energy security and certainty of pricing to large C&I customers.
Starsight Energy was founded in 2015 and is backed by Helios and AIIM, a member of Old Mutual Alternative Investments. It offers reliable and sustainable energy and cooling solutions – on- and off-grid – to the C&I sectors, with market leading operations in East and West Africa with over 656 sites in Nigeria, Kenya and Ghana.
Founded in 2011, SolarAfrica has built up extensive experience in delivering energy solutions through power purchase agreements (PPAs) to businesses across Southern Africa. It has evolved from a specialist provider of rooftop solar photovoltaic systems to a full-service provider of capex-free, green energy solutions ranging from solar and battery storage options through to wheeling and electricity trading to the C&I market.
SolarAfrica has already positioned itself as a competitive player in the newly enabled power wheeling space, having recently signed up large blue chip customers. The group is now well positioned to service large power users with a lower cost electricity alternative from a recently developed centralised solar generation site, taking advantage of South Africa’s newly revised regulations permitting wheeling and self-generation of up to 100MW by private generators.
Tony Carr, Starsight Energy’s group chief executive officer, explains: “This merger demonstrates our joint commitment to expand our footprint across Africa. With SolarAfrica, the new combined group becomes one of the largest commercial providers of reliable and clean energy solutions to the commercial and industrial sector across the continent.”
“The merger will enable efficiencies across the group, ranging from procurement to funding, and further allow for the rollout of our proprietary technology platform across the continent. These efficiencies will assist the group in providing a unique and valuable offering, that takes customers on a green energy journey to solve their power struggles and enables a sustainable future for their businesses,” says David McDonald, SolarAfrica Energy co-founder and chief executive officer.
Olusola Lawson, managing director and co-head at AIIM commented, “The transformational Starsight/SolarAfrica merger is a strong illustration of value creation in the nascent African commercial and industrial renewable energy space. As one of Africa’s largest renewable energy equity investors, and with a renewable energy portfolio of about 2GW, AIIM has been privileged to play a key role in the growth and expansion of the Starsight platform over the last five years. We are delighted to continue to support the business with additional funding to expedite the realisation of its substantial pipeline, and we look forward to the continued success of the combined platform.”
Ogbemi Ofuya, partner at Helios Investment Partners notes, “This transaction combines the complementary capabilities and geographical reach of two leading players in distributed energy solutions for businesses and industries across Africa. Helios has been a part of Starsight’s journey from its inception and has supported the growth of the business leveraging on our experience in building and scaling market leading infrastructure businesses on the continent. This transaction creates a market leader across sub-Saharan Africa’s largest economies, with a long track-record of providing, cleaner and more reliable energy solutions for its customers delivered at competitive price levels. We remain excited about the significant growth prospects of the enlarged Starsight platform.”