05 Jun REATILE GROUP INVESTS IN SOLAR EPC COMPANY juwi
Reatile formally entered into the agreement, with the signing of the papers by Simphiwe Mehlomakulu, Chairman of Reatile Group & Greg Austin, Managing Director of juwi, in April 2019. In so doing Reatile have futher extended their investment in the renewable energy sector in South Africa.
Mehlomakulu indicated that Reatile had invested in juwi, and in the renewable space, because juwi is on of the leading companies that installs and operates wind and solar power projects all over the world: “They are strong in Germany and other parts of Europe. I visited the juwi head office in Germany last year, I was astounded by the technology and the support to the technology I saw. They are a well-capitalised company and are developing projects all over Africa and in South Africa.”
“The Reatile Group is interested in investing in megawatts throughout the continent. Our vision is to diversity our energy mix away from fossil fuel and replace (or combine) it with renewables. We believe that renewables, as clean energy, is the energy of the future. We want to make sure that for every rand we make in fossil fuel; we make the same rand in renewables – so that when I die and leave this world, we have a neutral carbon footprint,” said Mehlomakulu.
According to Austin, the context for Reatile entering into the EPC company is one that relates back to the renewable energy IPP programme and the round 4 projects: “You may recall there were delays in the programme for a long time. Subsequent to that, during 2018, the Department of Energy went back to the successful investors and owners to renegotiate tariffs and to insert new requirements relating to active black shareholding in the project companies (that own the projects) and the contractors contracting into those project companies to deliver the projects.
“juwi subsequently engaged with the lead equity on the three projects, Old Mutual, and we have given them the commitment that we will be at least 40% black owned and at least 50% of that ownership will be through an active black industrialist shareholder. I am really delighted not only because our agreement with Reatile Renewables fulfils that objective, but also because there is a clear, broader strategic fit for the two companies.”
In 2018, Reatile invested in six PV projects which Old Mutual secured in Round 4 of REIPP, three of which are under construction by juwi, and for which juwi will also perform the operations and maintenance for an initial period of five years. Looking to the future with Reatile, Austin indicated that juwi is also engaging in a transaction involving its O&M subsidiary company, whereby Reatile would take up an equity stake in that company. “We are really at the stage of taking the first steps on a much longer and deeper relationship journey that we will be exploring, in terms of Reatile’s participation in our projects in South Africa and on the continent, as it relates to our hybrid power projects focusing on mines,” said Austin.
Mehlomakulu commented: “juwi also has projects in South Africa and in Africa where they would want to have investors like Reatile Group to take equity investment in those projects, because we are interested in ownership of megawatts, the actual power that we sell. The combination of investing in juwi, being the originator of the projects as well as looking for an investor in some of its projects throughout Africa, it makes a very symbiotic relationship with Reatile Group that fits very well together.”
Austin concurs: “We are excited about concluding this first engagement with Reatile: we have seen them to be the best partner to complement our strategy, and we have witnessed their positive active engagement already; the deal ticks the important boxes, particularly from a Department of Energy perspective, as they are an active black shareholder in juwi being a leading global renewables company; and we believe we can do a lot of good work together in South Africa and in sub-Saharan Africa.”