Projects Overview
Hulisani has equity investments in diverse but related renewable energy businesses including wind farms, wind tower production, solar farms, peaking plants, hybrid captive power plants and property lease cash flow managements.
Our investments and project pipeline are carefully selected through intense due diligence processes by our experienced management team.
This is to ensure that we deliver attractive returns that are consistent, predictable and reliable inflation-linked returns over the long term, whilst meaningfully 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. As majority of the projects are situated in areas with limited employment opportunities, we are encouraged to see the positive spinoffs of secure employment and the sustainable secondary 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
- In 2019, RustMo1 has 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
- RustMo1 has 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
Avon and Dedisa Peaking Power
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.
Peaking Power plants 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 convertible loan into Legend Power Solutions (which holds 27% in each of the Avon and Dedisa Peaking Power Plants).
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
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 per year
- In 2019, Kouga 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
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 key 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 the growing global market for wind tower components
- AfCTA is likely to create further incentives for export on the continent – expected in 2019
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 offers by uMhlaba for leases have been accepted by seven landowners, where the 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
Key Investment Focus In Renewable Energy
Generation
We identify and invest in the most promising electricity generation prospects to ensure that South Africa and other emerging markets can propel and power their economies to create more opportunities.
Distribution
Access to opportunity can only be made possible through distribution. It connects everybody and provides access to electricity, giving people the opportunity for employment, education and various means to enjoy a better life.
Value Chain
By investing in the energy ecosystem, we make it possible for other sectors in the economy to flourish and be revitalised, leading to more jobs and economic growth. The aim is to ensure sustainability and stability.
Services
Our investment in the energy universe ensures that stakeholders have access to advice and market insights to maximise all the opportunities that are available.
This allows them to make more informed decisions and ultimately receive more value.